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News release


New Jersey Industrial Market Builds Momentum Despite Tepid 1st Quarter

Industrial sector posts 10%+ drop in vacancy rates, 5%+ increase in rents during past year

EAST RUTHERFORD, NJ, May 7, 2014 — Although New Jersey’s industrial sector began 2014 at a tepid pace relative to the flurry of activity witnessed over the prior three quarters, year-over-year metrics dictate that the market was considerably stronger than it had been in previous years.

Capital markets activity in New Jersey also slowed in the first quarter compared with previous quarters. However, Russo Development is reportedly in contract to sell 680 Belleville Turnpike in Kearny to an investor, and the transaction could potentially set a new high-water mark in terms of pricing for the market.

“We have recently witnessed more bullish development activity along the Turnpike Corridor as the New Jersey industrial market nears pre-recession vacancy rates,” said David Knee, senior managing director at JLL. “First quarter leasing figures compared favorably versus historical first quarters, especially in the Turnpike Corridor in Central New Jersey, the Meadowlands, and the niche industrial markets along Interstate-80. I expect these trends to continue through 2014, driven by large commitments from several tenants that have circled the market in recent months.”

New Jersey's industrial market posted total net absorption of 1.0 million square feet in the first quarter of 2014, compared with 2.2 million square feet in the fourth quarter of 2013 and negative net absorption of 0.8 million square feet in the first quarter of 2013. The Northern New Jersey market witnessed flat net absorption, while the Central New Jersey market recorded 1.1 million square feet of net absorption in the first quarter of this year.

Approximately 7.6 million square feet of industrial construction was under way in New Jersey in the first quarter of 2014, compared with approximately 6.5 million square feet at year-end 2013. Tenants have committed to about 3.6 million square feet of the industrial product currently under construction.

“Big box” industrial product in close proximity to New York, the Port of New York and New Jersey, and Newark Liberty International Airport remained in short supply in early 2014. As a result, 70 percent of the speculative construction in progress is located within a 10-mile radius of the Port of New York and New Jersey. One important consideration of these looming deliveries is that they may result in temporary escalations in vacancy rates, availability rates and other measures in the event that the new facilities remain untenanted.

Other highlights from JLL’s first quarter 2014 industrial market report include:

  • The overall industrial vacancy rate for Northern and Central New Jersey decreased 2.7 percent (or 21 basis points) to 7.6 percent this quarter from 7.9 percent in the fourth quarter of 2013. In the past year, industrial vacancy rates fell 10.9 percent (or 93 basis points) from 8.6 percent in the first quarter of 2013.
  • The average investor-owned asking rental rate for Northern and Central New Jersey industrial space rose 2.4 percent to $5.58 per square foot this quarter from $5.45 per square foot in the fourth quarter of 2013. In the past year, average asking rents increased 5.2 percent from $5.31 per square foot in the first quarter of 2013.

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JLL is a leader in the northern/central New Jersey commercial real estate market, with more than 500 professionals and support staff providing agency leasing, tenant representation, industrial services, strategic consulting, project and development services, property management and investment sales/capital markets services to New Jersey's leading corporate tenants, investors and landlords. The firm, which assists clients from three full-service offices in Parsippany, Iselin (Metropark) and East Rutherford, also acts as local service provider for JLL global and national corporate clients in need of real estate assistance in New Jersey.

About JLL
JLL (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 fee revenue of $4 billion, JLL has more than 200 corporate offices and operates in 75 countries worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3 billion square feet and completed $99 billion in sales, acquisitions and finance transactions in 2013. Its investment management business, LaSalle Investment Management, has $48.0 billion of real estate assets under management. For further information, visit