At mid-2Q 2018 only three Class A industrial buildings larger than 500,000 square feet were available for lease throughout New Jersey. The shortage of space caused leasing to slow down at the start of the year without any big-box leases signed in first five months of 2018. On a positive note, five buildings greater than 500,000 square feet are set to break ground in 2018.
At the close of 2017, 12 separate 750,000-square-foot tenant requirements were active in New Jersey. Over the past two years, 21 leases in excess of 500,000 square feet closed, with traditional and e-commerce retailers remaining the biggest contributors to big-box leasing activity.
More than ever before, the race for space is on for industrial tenants seeking a short drive to Manhattan and the rest of the nation’s biggest consumer market. It’s why the state is teeming with new development up and down the New Jersey Turnpike.
Development might be booming in New Jersey’s red hot industrial market, but it’s a small group of institutional players that have seized the opportunity in the biggest way.
Middlesex County continues to be the epicenter of industrial leasing in northern and central New Jersey, thanks largely to its size and an ability to meet the demand for newly developed, state-of-the-art distribution space along the New Jersey Turnpike.
Bridge Development Partners is building a new 206,500-square-foot distribution center project in Carteret, a property that will bring new life to a 10-acre former brownfield site just off the New Jersey Turnpike.
A series of high-profile deals, along with research by a top real estate services firm, shows that the demand from e-commerce users is overwhelming in the Garden State. And it shows no signs of abating, as online retail businesses and on-demand food services only continue to grow.
Research by the firm has found that rents for warehouse and distribution space, particularly along the New Jersey Turnpike, are shattering the asking prices of landlords, as the competition among tenants becomes especially fierce.