703 Bartley-Chester Road in Mount Olive — Courtesy: Cushman & Wakefield
By Joshua Burd
A logistics firm has leased more than 840,000 square feet of industrial space in Morris County, helping to backfill what was a sprawling Toys R Us facility that investors have repositioned.
Multiple market reports say the deal by List Logistics, which took space at 703 Bartley-Chester Road in Mount Olive, is among the largest of 2022 and a top lease in the second quarter. The firm committed to a reported 844,373 square feet at the 1.43 million-square-foot complex in the town’s Flanders section, which follows a 570,777-square-foot lease at the site in early 2020 by US Elogistics Service Corp.
The transaction in Flanders comes four years after a joint venture of Square Mile Capital Management LLC, an affiliate of MSD Partners LP, and the Saadia Group acquired the property as part of the bankruptcy proceedings for Toys R Us.
The deal also came amid continued supply constraints in New Jersey’s industrial market. A report by Cushman & Wakefield found that leasing activity in the asset class fell to 4.8 million square feet in Q2 as occupiers struggled to find space, with vacancy remaining historically low at 1.8 percent.
John Obeid, C&W’s senior research manager in New Jersey, noted that Morris County and the Exit 8A submarket captured most of the space demand in the quarter, together accounting for 40.1 percent of the overall leasing activity. That was driven by the List Logistics deal and a reported 293,420-square-foot lease by Best Buy in Monroe.
Meantime, the average direct asking rent for warehouse space reached $13.96 per square foot, up 36.6 percent year over year, the research found. The report also noted that developers are racing to keep up with the demand in the Garden State.
“The shortage of existing big-box Class A space resulted in a new wave of developments this quarter,” Obeid said. “The construction pipeline remains robust, with 41 projects totaling 13.6 million square feet under construction.”
A separate report by Colliers, which tracked 8.2 million square feet of leasing activity in Q2, said that total was down 25.6 percent from the first quarter. The research also found that manufacturing and logistics users accounted for 51 percent of the leasing volume in the three-month period, citing the List Logistics deal and LG Electronics’ 410,737-square-foot renewal at 159 Milford Road in East Windsor.
C&W: Logistics firm takes 570,000 sq. ft. at Mount Olive industrial complex