The industrial market in northern New Jersey is currently very hot according to surveys by regional industrial realtors. For the year 2016, absorption is reported to have reached an all-time high while vacancy rates, at 5.0% overall and 4.5% for warehouse space, were at record lows. Asking rents have reached levels not seen in a decade. Areas in the NJ Turnpike corridor, notably the meadowlands and further south, at exit 7A, have reported the best market conditions, with vacancy rates below 4%.
The lack of suitable space in much of the state has led to developers breaking ground for 16 projects totaling 4.4 million square feet of space in the 4th Quarter of 2016 alone. The total of new projects commenced in 2016 total 11.2 million SF.
Demand is strong while inventory levels are very low. The result has been quickly moving properties and reports of sharply appreciating prices. Leasing activity has increased year over year, with half or more of all demand has been coming from e-commerce related companies.
Lease asking prices have appreciated 4% over the past quarter, and 15.5% since 2015, and currently range from the high $4.00’s to over $10.00 PSF NNN, depending upon location, size, and other physical characteristics. Sale prices range from the $60’s to over $100 psf.