By Joshua Burd
The state’s industrial market saw a spike in renewal activity this summer, amid the ongoing lack of new supply and the unrelenting demand from tenants.
A new report by Colliers International said as much last week, noting that renewals accounted for 32.9 percent of total leasing activity in northern and central New Jersey during the third quarter. By comparison, renewals accounted for 20.8 percent of activity in the second quarter and 13.8 percent a year earlier.
The largest Q3 renewal was Barnes & Noble’s 1.1 million-square-foot extension in Monroe, which was also the largest Q3 lease identified by Colliers’ research team.
“With fewer available options for occupiers to choose from, renewal activity saw a sharp increase this quarter,” the firm wrote, noting that the uptick in renewal activity, combined with tenant demand for development sites, resulted in lower-than-average net absorption. The lack of available space contributed to 8.9 million square feet of total leasing activity during Q3, down 15.9 percent year over year, along with just under 510,000 square feet of net absorption.
Overall year-to-date leasing activity through Q3 totaled 30.2 million square feet, up from 29.8 million square feet over the same period last year. Colliers also found that, at $8.90 per square foot, average asking rent for New Jersey industrial space is up 12.2 percent year over year.
Another renewal, Essendant’s 575,000-square-foot lease at 100 Liberty Way in Cranbury, was also in the top five transactions identified by Colliers during Q3.
