950 Convery Blvd. in Perth Amboy — Courtesy: CBRE
By Joshua Burd
New Jersey industrial landlords have inked a flurry of big-box leases in recent months, Cushman & Wakefield said, driving nearly 9 million square feet of deal volume during the third quarter.
Researchers with the firm identified eight new leases greater than 300,000 square feet that were completed during Q3. The largest among them involved The RealReal, an online consignment retailer, which took 492,534 square feet at 950 Convery Blvd. in Perth Amboy.
Other large deals during the quarter include leases at 300 and 286 Prospect Plains Road in Cranbury, where the Sudler Cos. leased about 416,000 square feet and 342,000 square feet, respectively, to W.B. Mason Inc. and RUGSUSA.
The deals contributed to 8.8 million square feet of industrial leasing during the quarter, C&W found, touting it as a new high for in northern and central New Jersey, despite historically low vacancy of 3.4 percent. Developers, meantime, are racing to keep up with the demand, delivering 2.8 million square feet of warehouse space during Q3 and 9.1 million square feet year to date.
“With very little existing available space in almost every New Jersey submarket, industrial tenants have become much more decisive in their approach to leasing,” said Stan Danzig, vice chairman with Cushman & Wakefield. “Every worthwhile building has multiple prospects. Tenants who recognize this are getting out into the marketplace sooner, and with their budgets approved up front.
“In turn, deals are reaching the LOI stage much more quickly. Labor — both cost and supply — is also top of mind, especially with so many new, high-population ecommerce facilities. The drive to tap into the region’s most fertile labor markets is resulting in the spread of development to previously untapped markets.”
A separate market report by Newmark Knight Frank highlighted the success of redevelopment projects in the state’s industrial pipeline. Sudler’s two deals in Cranbury took place at what had been a vacant 500,000-square-foot office building, which the developer razed to make way for two state-of-the-art distribution centers.
At 150 Totowa Road in Wayne, Peykar Family Properties is developing a new industrial building at what had been a similarly defunct office complex. NKF noted that Gucci has signed a lease for the 459,822-square-foot property.
“New Jersey’s older office inventory is a target for developers looking to capitalize on surging demand for modern big-box warehouse space,” Mark Russo, NKF’s research manager in northern New Jersey, wrote in the report. “High office vacancy in the Garden State is producing a greater willingness to tear down buildings, especially those in desirable locations for warehouse users.”
