By Joshua Burd
Industrial space in and around New Jersey continued to attract household names in the first quarter, as leasing activity remained on a strong and steady pace to start the year.
A new market report by Colliers International found that northern and central New Jersey registered 10.6 million square feet of industrial leases during Q1, which is 9 percent higher than the five-year quarterly average. That includes a 459,500-square-foot commitment by TJ Maxx at 50 Bryla St. in Carteret, a building developed by The Hampshire Cos.
The firm also pointed to a high-profile transaction just minutes outside New Jersey — Matrix Development’s 975,000-square-foot lease with Ikea in Staten Island — along with a 369,000-square-foot lease by One Stop Logistics at 83 Stults Road in South Brunswick.
“Following strong leasing activity at the end of 2017, steady demand continued in the first quarter, driving the overall availability rate down to 5.3 percent, representing a year-over-year improvement of 120 basis points,” said David A. Simon, executive managing director and Colliers’ New Jersey market leader.
The activity comes as average asking rates continue to rise in New Jersey’s industrial market. Rates grew to a record high of $7.56 per square foot at the end of Q1, Colliers found, compared to $7.23 per square foot at the end of 2017.
Northern New Jersey recorded 5 million square feet of leasing during the quarter, driving positive absorption to 1.2 million square feet and bringing availability to 6.6 percent, the report said. Colliers also tracked 5.7 million square feet of industrial leasing activity in Central Jersey, where average asking rates rose to about $7.17 per square foot.
“In the northern counties, higher-than-average leasing volume coupled with new deliveries that were pre-leased contributed to positive net absorption,” Simon said. “Activity in Central New Jersey is being driven by tenant demand for new construction, particularly along the turnpike corridor and the Exit 10 submarket.”
Six new development projects totaling 1.9 million square feet broke ground during Q1, bringing the construction pipeline to 34 properties spanning 14.1 million square feet, the report found.