234 Murray Hill Pkwy. in East Rutherford — Courtesy: NAI James E. Hanson
By Joshua Burd
Rent growth and falling vacancy show no signs of slowing down for Meadowlands industrial space, thanks in large part to the continued flight of tenants from New York City.
Research by NAI James E. Hanson notes that average asking in the Meadowlands submarket rose to $8.57 per square foot by the end of 2017, up $0.60 from a year earlier. Vacancy ended the year at 3.7 percent, up slightly from Q4 2016, following 711,000 square feet of net absorption during the year and nearly 4.6 million square feet of overall leasing activity.
NAI Hanson’s Thomas Vetter pointed to two dynamics that he says will continue to “drive what has been a robust market well into 2018.”
“Although much of this demand will continue to be derived from the usual suspect — e-commerce — restricted supply in the Manhattan and to a larger extent Brooklyn markets is further powering New Jersey’s quarter-to-quarter industrial velocity,” Vetter said. He added that developers in the city continue to look at redeveloping existing industrial sites into multifamily properties, “placing even further stress on the supply pipeline.”
The NAI Hanson senior vice president also said that, “due to the diversity of demand types, developers with a vision and the financial capabilities to carry out industrial projects in northern New Jersey can look forward to another strong year in 2018.” The 94 million-square-foot submarket is among the strongest in New Jersey, boasting the third-highest average asking rate in the state.
The Meadowlands’ top lease transactions to end the year included Sanofi taking 84,237 square feet at 4 Bell Drive in Ridgefield, Market Gauge Asset Management LLC leasing 79,772 square feet at 205 Campus Drive in Kearny and Posh Nosh leasing 31,331 square feet at 1 Jacobus Ave. in Kearny, NAI Hanson found. The Hackensack-based firm also highlighted a transaction it brokered at 235 Murray Hill Pkwy. in East Rutherford, where Goffa International Corp. leased 26,900 square feet.
Meantime, NAI Hanson identified several projects under construction or nearing completion in the Meadowlands, including:
- 46 Meadowlands Pkwy. in Secaucus (302,727 square feet), by Hartz Mountain Industries
- 1 Eastern Road in Kearny (197,000 square feet) by Hugo Neu Realty Management
- 5 Ethel Blvd. in Wood-Ridge (193,805 square feet) by Duke Realty Corp.
- Bergen Avenue in Kearny (130,043 square feet) by the town of Kearny and Hartz Mountain
- 400 Huyler Street in South Hackensack (115,611 square feet) by Forsgate Industrial Partners
The Meadowlands was also home to the top three and six of the 10 largest industrial investment sales in northern New Jersey last year. The top three, which include buildings in Teterboro and Carlstadt, all commanded more than $200 per square foot.