Lower vacancy rates and higher rental rates have defined transit hub markets when compared to the suburban New Jersey office market for the past several years.
From an equity markets perspective, demand for industrial product continues to be strong with institutions and private funds that are underweight in northeast industrial properties. The reason we are not seeing more activity is because there has been — and continues to be — a lack of quality offerings in the most sought after markets from the Meadowlands down along the Interstate 95/Turnpike Corridor to Exits 8A/7A.
When exploring options for mixed-use development, it is important to understand the micro market in which you are planning to build. Whether urban or suburban, a close look at existing conditions and other development projects on the boards will identify small niche opportunities for right-sized retail, cultural and restaurant uses.
New Jersey has a strong retail environment due its population density, which is higher than the national average. Retailers are also attracted to the Garden State’s proximity to New York, which is one of the world’s retail capitals. A large percentage of New Jersey’s population is in Northern New Jersey and retailers targeting consumers have plenty of space options along Interstate 95, The Garden State Parkway and U.S. Route 1/9.
With e-commerce fulfillment increasingly becoming one of the strongest drivers of industrial real estate, the need for warehouse labor has also increased dramatically. This trend, combined with a decreasing unemployment rate, has forced up labor costs for many e-commerce operations.
New Jersey’s real estate market remained fundamentally strong at year-end 2016 and appears poised to retain its vitality in the coming year. Urban and suburban transit hub markets should remain a bright spot within the state’s slowing office market in 2017, while New Jersey’s industrial sector is in the midst of the greatest burst of construction since 2014. A significant influx of national retailers to transit-oriented locations, traditional downtowns and even college campuses has positively impacted the state’s retail market.