New Jersey’s Industrial Deliveries Slow
New construction projects, however, saw a notable increase, according to Yardi Matrix data.
New Jersey’s industrial market remained active through the end of November, supported by steady investment activity and a growing construction pipeline, according to Yardi Matrix data.
Nearly 5.6 million square feet was under construction across the state, marking a notable increase from last year, even as development levels remained below national averages. Deliveries slowed year-over-year, while pricing continued to lead peer markets, reflecting the metro’s position as one of the most expensive industrial hubs in the nation. Vacancy edged higher from last year’s level but remained below the national average.
Construction pipeline grows from last year’s level
Central 9 Logistics Park in Old Bridge, N.J. will eventually comprise 4.1 million square feet of industrial space across nine separate buildings. Image courtesy of Madison Realty Capital
As of the end of November, New Jersey had nearly 5.6 million square feet of industrial space under construction across 22 facilities, accounting for 0.9 percent of total stock—below the 1.7 percent national average. Among peer markets, Phoenix (19.4 million square feet) and Dallas (29 million square feet) continued to lead development activity.
Despite trailing those metros, New Jersey’s industrial pipeline expanded substantially compared to the same period last year, when just 1.9 million square feet was under construction. Through November, developers broke ground on 19 properties totaling 3.7 million square feet, representing 0.6 percent of total stock and remaining below the 1.1 percent national average.
A major industrial campus in Old Bridge, N.J., secured $654 million in construction financing, supporting both refinancing of completed buildings and the build-out of phase two at Central 9 Logistics Park. The nine-building, 4.1 million-square-foot campus is positioned off Route 9 with access to the Garden State Parkway, New Jersey Turnpike and I-287, and leasing momentum at the site has enabled the acceleration of second-phase construction.
Deliveries slow year-over-year
New Jersey saw the delivery of approximately 5 million square feet of industrial space across 24 properties through the end of November, accounting for 0.8 percent of total stock—below the 1.3 percent national average. Industrial completions declined from the same period last year, when 44 properties totaling 8.9 million square feet came online.
Among peer markets, only Indianapolis (1.5 million square feet) saw less new industrial space. Dallas (17.8 million square feet), Phoenix (16.6 million square feet) and Kansas City (12.9 million square feet) posted the highest delivery totals.
This October, GOFO opened its New Jersey Super Hub, a more than 400,000-square-foot logistics facility that is part of its coast-to-coast delivery network. The company’s largest and most advanced logistics facility in the U.S., also known as EWR Super Hub, rises in Newark, N.J. It features double-deck cross-belt sorters, intelligent sorting logistics systems, robotic automation and a dual-deck throughput of six parcels per second, with the hub processing over 40,000 parcels per hour and handling more than 800,000 parcels daily.
Sales activity remains among the nation’s highest
New Jersey’s industrial sales volume reached $2.5 billion year-to-date through November, according to Yardi Matrix data, roughly in line with the $2.1 billion recorded during the same period last year. Only Phoenix ($3.1 billion) and Chicago ($2.5 billion) posted higher volumes, while investment totals for Indianapolis industrial space ($561.2 million) and Kansas City industrial space ($218.9 million) trailed.
A total of 128 facilities totaling 12.9 million square feet traded in the metro. Average pricing reached $226.37 per square foot—the highest among peer markets.
In October, Terreno Realty Corp. sold one of its East Coast industrial holdings, a 603,000-square-foot warehouse and distribution building in South Brunswick, N.J., for approximately $144.2 million. The property spans 35.5 acres at 130 Interstate Blvd., in the Cranbury submarket. Terreno had acquired the original building, consisting of 413,000 square feet, in September 2010 for $22.5 million.
EQT Real Estate is also expanding its industrial portfolio with the acquisition of 893,625 square feet across 11 properties along the New Jersey Turnpike. Each asset is located between Exits 2 and 14 along the highway, offering access to the New York City and Philadelphia metros, as well as to the rest of New Jersey. The entire portfolio is fully leased to a diverse mix of tenants.
Vacancy rises from last year but stays below national level
New Jersey industrial space had an average vacancy rate of 8.2 percent as of the end of November, below the 9.5 percent national average. The rate increased from last year, when vacancy measured 5.8 percent.
Back in July, Turnbridge Equities signed a long-term industrial lease with TWTH Express for 255,069 square feet at 169 Pulaski St. in Bayonne, N.J. The leased space comprises a portion of the property’s larger warehouse and had been occupied by Waitex Global as part of a sale-leaseback agreement.
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