New Jersey’s Industrial Deliveries Slow, Vacancy Climbs

New Jersey’s industrial sector is moving through a slower development cycle, with construction activity lagging the national average and deliveries easing compared to last year.

Year-to-date through July, the metro had 5.7 million square feet underway, accounting for just 0.9 percent of stock, well below the 1.7 percent U.S. rate, Yardi Matrix data shows. Completions also declined, leaving the market among the nation’s lowest for new supply.

In the meantime, vacancy climbed to 11.2 percent—above the 9.1 percent national figure—even as leasing deals continued to close.

Pipeline expansion trails national pace

New Jersey’s industrial pipeline comprised almost 5.7 million square feet of space under construction year-to-date through July, according to Yardi Matrix data. The metro’s 121 under-construction projects accounted for 0.9 percent of the total inventory, much lower than the 1.7 percent U.S. index. 

Among peer markets, Dallas took the spotlight (30.5 million square feet), followed by Phoenix (16.4 million square feet) and Atlanta (11 million square feet).

By the end of July, nearly 2.3 million square feet of industrial space had broken ground across 11 properties in the metro—representing 0.4 percent of the total inventory.

Russo Development and Forsgate Industrial Partners are currently developing the largest project in the metro, the 932,168-square-foot Building A at Kingsland Meadowlands. The speculative project—one of two underway in the park—is located at 3000 Valley Brook Road in Lyndhurst. The building will have 40-foot clear heights, 142 dock doors, four grade-level doors and parking for 271 trailers.

Matrix Development Group is bringing a new Class A industrial project to Budd Lake, N.J., with the development of Matrix Logistics Park. Located within Mount Olive Township, the park will feature two buildings at 2000 and 3000 International Drive, totaling 781,748 square feet. The first building will span 196,748 square feet, while the second will offer 585,000 square feet of modern industrial space.

Delivery pace slows

A total of 3.9 million square feet of industrial space were delivered in the metro year-to-date through July, with 17 projects coming online. This marks a decline year-over-year, when 26 projects spanning 6.1 million square feet were delivered.

The metro recorded one of the lowest industrial deliveries in the country, alongside Atlanta (3 million square feet) and Indianapolis (752,500 square feet). Phoenix (11.8 million square feet) and Kansas City (10.6 million square feet) led nationwide.

Brookfield Properties wrapped on Liberty Commerce Center, one of the largest projects in the metro. The 414,368-square-foot distribution facility features 42-foot clear heights. Back in 2023 Brookfield closed on land purchases of 58 acres in Northern New Jersey. Plans call for the construction of nearly 1 million square feet of Class A distribution space across four projects.

Sale price holds above national average

New Jersey’s industrial investment volume year-to-date as of July amounted to $1.6 billion. Assets in the metro traded for just $234 per square foot on average, much higher than the nation’s $138 per square foot figure.

Among peer markets, Phoenix ($1.8 billion) registered the highest sale volume, while Indianapolis ($224.3 million) and Kansas City ($50.7 million) were at the opposite end of the spectrum.

A total of 8.2 million square feet across 78 industrial properties changed hands in the metro. The largest transaction of the year so far was Prologis’ acquisition of a 600,000-square-foot warehouse in South Brunswick, N.J., for $166.8 million. The facility, completed in 2008, was sold by ARC Realty.

Back in May, the joint venture between Bain Capital and Oliver Street Capital purchased a 784,000-square-foot industrial portfolio across Northern New Jersey for $208 million. Blackstone sold the collection, which includes 11 Class B warehouses with an average suite size of 23,000 square feet. Properties are spread throughout infill submarkets.

Vacancy climbs despite leasing activity

The vacancy in the metro clocked in at 11.2 percent as of the end of June, higher than the national average of 9.1 percent, according to the latest Yardi Matrix report. Kansas City (4.3 percent) and Atlanta (8.0 percent) fared better than New Jersey in terms of vacancy. On the other side of the spectrum, Chicago (12.5 percent) recorded an even larger rate.

The 1.2 million-square-foot Crow Holdings at Carteret campus reached full occupancy in July, following BroadRange Logistics’ lease of the property’s 480,000-square-foot facility at 500 Salt Meadow Road in Carteret, N.J.

Turnbridge Equities also signed a long-term industrial lease with TWTH Express for 255,069 square feet at 169 Pulaski St. in Bayonne, N.J. This will be the tenant’s newest warehouse and distribution facility.