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News release

EAST RUTHERFORD, NJ

New Jersey Industrial Market Builds on Momentum Generated in 1st Quarter

Industrial sector posts 10%+ drop in vacancy rates; 6%+ increase in rents during past year


EAST RUTHERFORD, NJ, August 11, 2014 — New Jersey’s industrial sector continued to thrive in the second quarter of 2014, with deal volume remaining at the strong pace set at the start of the year. Leasing activity in Central New Jersey easily surpassed the rest of the state this quarter, according to JLL.

New Jersey's industrial market posted total net absorption of nearly 2.0 million square feet in the second quarter of 2014, compared with 1.0 million square feet absorbed in the first quarter and approximately 800,000 square feet of negative absorption one year ago. Nearly 1.9 million square feet of the absorption posted this quarter took place in the Central New Jersey market.

Since climbing above 9.0 percent at year-end 2009, New Jersey’s overall industrial vacancy rate has trended lower through midyear 2014 in response to strong demand for warehouse/distribution space. The state’s overall industrial vacancy rate has remained below 8.0 percent for the past three consecutive quarters.

Capital markets activity in New Jersey rebounded slightly in the second quarter, but remained constrained compared to one year ago. In one of the largest sales completed this quarter, L&B Realty Advisors LLP acquired 10 industrial properties, totaling 861,485 square feet, throughout Northern and Central New Jersey from Sitex Group LLC for $91.3 million. In addition, North American Terminals bought a 115,078-square-foot facility along with a 78,600-square-foot truck terminal in Elizabeth from Bilkays Express Co. for $20.6 million.

“Pricing has continued to trend higher throughout New Jersey, due primarily to strong leasing activity thus far this year” said David Knee, senior managing director at JLL. “The combination of rising industrial rental rates and ongoing low interest rates should drive higher sales volume and pricing in the second half of the year.”
Approximately 5.3 million square feet of industrial product was under construction in New Jersey in the second quarter of 2014, compared with approximately 7.6 million square feet the previous quarter. Tenants have pre-leased about 1.6 million square feet of the industrial space currently under construction.

The amount of new industrial projects either approved or underway has increased dramatically over the past year in New Jersey. The majority of the construction is centered around the Turnpike Corridor, with 16.3 million square feet in projects, and the Port of New York/New Jersey, with 7.3 million square feet in developments. All of this industrial space could be delivered over the next two years.

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

  • The overall industrial vacancy rate for Northern and Central New Jersey increased 1.4 percent (or 10 basis points) to 7.8 percent this quarter from 7.7 percent in the first quarter of 2014. In the past year, the industrial vacancy rate has fallen 10.1 percent (or 90 basis points) from 8.7 percent in the second quarter of 2013.
  • The average asking rental rate for Northern and Central New Jersey industrial space rose one percent to $5.64 per square foot compared to $5.58 per square foot in the first quarter of 2014. Asking rents increased more than 6.0 percent during the past year.

For more news, videos and research resources from JLL, please visit the firm's U.S. media center Web page. Bookmark it here: http://bit.ly/18P2tkv

For more industrial insights, check out JLL’s Q2 North America Industrial Outlook.

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. JLL is the brand name of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com.​