The Port of New York and New Jersey logged record-breaking cargo volume in the first five months of 2019 and the elevated activity level is further bolstering New Jersey’s already booming industrial real estate sector.
According to numbers recently released by the Port Authority of New York and New Jersey, between January and May 2019, the Port of New York and New Jersey handled 3,041,814 TEUs, or 20-foot equivalent units, marking an all-time record at the seaport. Activity in May, totaling 643,706 TEUs, yielded a monthly record and marked a notable year-over-year increase of 8.4 percent.
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The rise in cargo volume this year has pushed the port up in the national rankings to the position of second-busiest port, knocking the Port of Long Beach in Southern California out of the second-place spot for the first time in 20 years. The flurry of activity is all good news for the local industrial real estate sector.
“The continued growth in imports, resulting in record numbers at the port, is converting to record numbers in the industrial real estate market, meaning historically high lease rates, record net absorption and record planned development in the pipeline,” Mindy Lissner, executive vice president with CBRE, told Commercial Property Executive. The average asking lease rate for industrial product in New Jersey reached its highest point ever in the second quarter of 2019, rising to $7.39 per square foot, per a CBRE report.
Net absorption totaled a robust 3.6 million square feet, continuing positive results for the 10th quarter in a row. And at the close of the quarter, 20 buildings totaling 6.7 million square feet were under construction in the Garden State. Among the projects on the horizon is Linden Logistics Center, a 4.1 million-square-foot logistics park that Advance Realty Investors, Greek Development and PGIM Real Estate recently broke ground on in Linden, approximately 10 miles from the port. Upon completion, the 350-acre warehouse complex, located minutes from the heavily traveled New Jersey Turnpike, will be the largest active industrial development in the Port of New York and New Jersey area.
More good times to come
The industrial sector in the Garden State appears poised for more achievement. “The New Jersey market’s incredible success story is being driven by the continued growth of e-commerce and retail sales combined with proximity to consumers and labor along with one of the best transportation networks in the country,” Lissner said.
And the upward trend in cargo volume numbers at the Port of New York and New Jersey is likely to persist, buoyed by the Port Authority’s opening of the ExpressRail Port Jersey facility in June and the previous completion of the Bayonne Bridge raising. “With forward-looking infrastructure investments by the Port Authority, we anticipate that the port will continue to exhibit solid growth in the future, boding well for the industrial market and the region’s economy,” she added.