26C — July 26 - August 15, 2013 — Brokerage Directory — Mid Atlantic Real Estate Journal
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Strong market fundamentals, cheaper financing propel capital markets activity Jones Lang LaSalle reports boost in New Jersey industrial sales
H
A S B R O U C K HEIGHTS, NJ—New Jersey’s industrial
market fundamentals and the availability of cheaper financing options. Duke Realty Corp. record- ed the splashiest purchase of the quarter, acquiring two adjacent Class A warehouse facilities in Cranbury. The 949,580-square-foot portfolio is fully leased long-term to Crate & Barrel. Exeter Prop- erty Group purchased the International Trade Center inMount Olive, a 1.2 million- square-foot portfolio, from JPMorgan Chase & Co. Sitex Group continued to expand its footprint in the Mead-
owlands, acquiring the fully leased, 287,000-square-foot 200 Riser Road warehouse facility in Little Ferry from Mack-Cali Realty Corp. Duke Realty purchased the portfolio for $75.3 million, representing a cap rate of 6.0 percent, which may indicate that cap rates have begun their descent in Central New Jersey. This is particularly notable as investment sales in the Central New Jersey market had not yet achieved the low cap rates recently recorded in Northern New Jersey, particularly in the
Meadowlands submarket. “The good news is the leas- ing market for high-quality space remains tight along the Turnpike Corridor,” said David Knee, managing direc- tor at Jones Lang LaSalle. “However, because there are so few high cube ‘big box’ spaces available, tenant demand for these proper- ties and the lack of demand for lower-quality properties may have contributed to a macro-level lull in leasing volumes. Touring activity has remained brisk for the Class A and Class B spaces
available, which means that further tightening and ad- ditional construction activity may be forthcoming.” New Jersey’s industrial market posted total net ab- sorption of 279,501 s/f in the second quarter of 2013. The Northern New Jersey sub- market recorded 87,515 s/f of negative net absorption, while Central New Jersey recorded 367,016 s/f of net absorption. Industrial development activity will continue to flour- ish during the summer, with a number of new projects expected to break ground along the Turnpike Corridor. KTR Capital Partners has begun construction on a 1 million-square-foot build- to-suit for Amazon.com in Robbinsville, with comple- tion slated for mid-2014. The facility represents the largest industrial construction proj- ect in the state since 2007. IDI completed construction on the 750,000-square-foot Middlesex Center II, 101 Middlesex Boulevard in South Bruns- wick during the quarter. The warehouse/distribution facility is fully leased to Wil- liams-Sonoma Inc. In addi- tion, The Hampshire Cos. completed construction on a 232,000-square-foot distri- bution center at 200 Milik Street in Carteret. Other highlights from JLL’s second quarter 2013 industrial market report include: • The overall industrial vacancy rate for Northern and Central New Jersey in- creased 10 basis points to 8.8 percent this quarter from 8.7 percent in the first quarter of the year. Industrial vacancy rates have fallen 1.2 percent, from 8.9 percent, year-over- year. • The average investor- owned asking rental rate for Northern and Central New Jersey fell 2 percent to $5.27 per square foot this quarter from $5.38 per square foot in the first quarter of the year. Average asking rents have increased 2.1 percent year- over-year. In 2012, the New York tri- state JLL team completed approximately 23.8 million s/f in lease transactions. n
sector saw a flurry of investment s a l e s i n the second quarter of 2013, with at least 10 significant transactions r e c o r d e d .
David Knee
Capital markets activity was particularly strong, as investors were fueled by the state’s desirable industrial
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