By Joshua Burd
Amazon continued its rapid expansion in New Jersey in the first quarter, accounting for three of the top five industrial leases in northern and central New Jersey to start the year.
A market report by Colliers International said as much this week, noting that the e-commerce giant signed five new leases totaling 1.8 million square feet during Q1. The largest among them was a 661,741-square-foot, full-building commitment at 429 Delancy St. in Newark, a property now under construction in the heart of the city’s port district.
Amazon also took 415,533 square feet at 50 Central Ave. in Kearny and 386,296 square feet at 1800 Lower Road in Linden, Colliers reported. Its expansion to start the year was already several months in the making, even though the company in recent weeks has ramped up operations even further to meet demand created by the COVID-19 crisis.
“As consumer preference for one-day and same-day delivery has increased, it’s driven e-commerce companies to relentlessly seek out available space in densely populated areas to meet this demand,” said John Obeid, Colliers’ senior director for suburban tristate research. “Amazon has been aggressive in their space search over the last two quarters, and after completing seven transactions totaling 1.7 million square feet last quarter, the e-commerce giant continued to grow its occupancy within New Jersey, signing five new leases totaling 1.8 million square feet during the first quarter.”
Colliers said overall tenant activity stayed robust during the first quarter — despite the lack of available space — continuing its surge from 2019. Northern and central New Jersey also saw a rise in industrial occupancy and positive absorption for the 29th consecutive quarter.
Meantime, the market saw 10 new building deliveries from January through March for a combined 4.2 million square feet, more than two-thirds of which was preleased. That new construction impacted average asking rent, which rose 5.7 percent year over year to $8.90 per square foot.
As Colliers noted, the Port submarket was the biggest winner from Amazon’s latest expansion, accounting for more than half of the 5.1 million square feet leased during Q1. Its new location in Newark, a speculative development by Duke Realty, is bounded by the New Jersey Turnpike, Interstate 78 and Routes 1 and 9, while it’s slated for completion in the fourth quarter.
Aside from the online retailer, the other largest leases included Geodis Logistics’ 611,320-square-foot renewal at 1 Costco Drive in Monroe, along with U.S. Elogistic’s 570,777-square-foot lease at 703 Bartley Chester Road in Flanders.