By Joshua Burd
Smaller deals are looming large in New Jersey’s industrial market, helping to drive occupancy gains as developers eye continued momentum in the second half of the year.
According to CBRE, northern and central New Jersey recorded 5.9 million square feet of leasing activity in the second quarter, marking a 16 percent increase from the first quarter. Nearly half of that volume came from third-party logistics firms and other smaller tenants, ensuring that occupancy increased for the first time since early 2023.
“New Jersey’s industrial market continues to exhibit resiliency despite economic concerns and lingering inflation felt earlier this year,” CBRE’s Chad Hillyer said. “Smaller leases by 3PL and food and beverage companies accounted for most of the leasing activity during the quarter, which once again was strong, especially in the 50,000- to 100,000-square-foot range.”
The firm’s Q2 market report noted that the region’s vacancy rate jumped by 10 basis points to 5 percent, citing the delivery of 2 million square feet of new space. Notably, that’s the slowest uptick since the same time last year, CBRE said, adding that tenants absorbed a total of 1.6 million square feet in properties built after 2021.
The largest two leases in the market during Q2 were DSV’s 355,000-square-foot commitment at 300 Salt Meadow Road in Carteret, one of three new buildings in the borough by Crow Holdings Industrial, and JW Fulfillment’s 342,000-square-foot deal at 99 Callahan Blvd. in Sayreville, part of Trammell Crow Co.’s Arsenal Trade Center.
While the vacancy rate was up slightly, sublease availabilities reached the highest level since the third quarter of 2020 at 6.5 million square feet, CBRE found. The average asking rents remained relatively stable quarter-over-quarter, with Class A rents at $19.40 per square foot, while space in Class B and C properties experienced an increase of 3 percent to $16.62 per square foot due to strong demand for smaller units.
