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Amazon.com signs two of the most noteworthy leases in recent memory in first quarter of 2013, a signal of the market’s continued prominence and desirability
HASBROUCK HEIGHTS, NJ, May 28, 2013 — An ongoing flight to quality coupled with a lack of existing and developable Class A industrial space in Northern New Jersey have fueled activity in the Central New Jersey market. Jones Lang LaSalle’s first-quarter 2013 New Jersey industrial market report showed that this phenomenon, as demonstrated by two large lease transactions by Amazon.com in Central New Jersey, should serve to maintain downward pressure on vacancy rates going forward.
“Indicators point toward further stabilization in both the Northern and Central New Jersey industrial markets,” said David Knee, managing director at Jones Lang LaSalle. “We have recently witnessed a resurgence in construction activity along the New Jersey Turnpike, particularly in the Port and Exit 8A submarkets, along with continued demand from institutional investors. After a year of rapid economic recovery, we remain optimistic that the New Jersey industrial market will continue to perform well in 2013, albeit at a comparatively slower pace.”
Following Amazon.com’s signing of a 1 million-square-foot build-to-suit lease at the Matrix Business Park at 7A in Robbinsville in the fourth quarter of 2012, the e-commerce retailer leased 565,405 square feet of space at the soon-to-be-renovated 301 Blair Road in Avenel. Upon fit-out and occupancy, Amazon.com will soon have the capability for delivering goods to its consumers via next-day delivery throughout the region, counteracting the state-imposed sales tax on online purchases that will be enforced in July. Additionally, Williams-Sonoma signed a lease to occupy the entire Industrial Developments International Inc.-owned 750,000-square-foot development site at 101 Middlesex Center Boulevard in South Brunswick. The aforementioned transactions are indicative of the health of the New Jersey industrial market and represent an aggressive bet on the continued growth of e-commerce retailing and the local economy.
New Jersey posted total net absorption of -588,565 square feet in the first quarter of 2013. The Northern New Jersey submarket recorded -493,476 square feet of net absorption while Central New Jersey recorded -95,089 square feet of net absorption. Despite this negative absorption, a persistent appetite for quality “big box” distribution space amongst users is anticipated to drive positive absorption in the coming quarters and years. More than 3.0 million square feet of industrial projects were under development in the Port submarket alone as of the first quarter of 2013. This represents the largest volume of new construction of any submarket in the state. New construction was also underway at Exit 10, where J.G. Petrucci Co. is developing a 570,000-square-foot warehouse/distribution facility, and Exit 8A, where IDI is wrapping up construction on a 750,000-square-foot warehouse/distribution facility. IDI has also begun speculative construction on a 450,000-square-foot facility to be located adjacent to the 750,000-square-foot facility.
Other highlights from Jones Jang LaSalle’s first quarter 2013 industrial market report include:
Jones Lang LaSalle’s team of in-house research professionals compiled the Jones Lang LaSalle first-quarter 2013 New Jersey industrial report, which provides an extensive analysis of the New Jersey industrial property market.Jones Lang LaSalle’s Industrial Services Group is the leader in industrial real estate services in New Jersey based on total leasing transaction volume.
JLL is a leader in the New York tri-state commercial real estate market, with more than 1,600 of the most recognized industry experts offering brokerage, capital markets, property/facilities management, consulting, and project and development services. In 2012, the New York tri-state team completed approximately 23.8 million square feet in lease transactions, arranged capital markets transactions valued at $1.57 billion, managed projects valued at nearly $7.0 billion, and oversaw a property and facilities management portfolio of 102.1 million square feet and an agency leasing portfolio of 76.0 million square feet.
About Jones Lang LaSalleJones Lang LaSalle (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 2.6 billion square feet and completed $63 billion in sales, acquisitions and finance transactions in 2012. Its investment management business, LaSalle Investment Management, has $47.7 billion of real estate assets under management. For further information, visit www.jll.com.
George Shea, Mark Faris - Shea Communications