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News release


Strong Demand Drives Strongest Period for Industrial Leasing in 10+ Years

New Jersey posted 8.0 MSF of positive absorption in 2014; more than double the market’s historical average

EAST RUTHERFORD, NJ, January 13, 2015 — New Jersey’s industrial sector posted the strongest year for industrial leasing the state has seen in more than a decade, according to JLL. The market recorded approximately 8.0 million square feet in positive absorption in 2014, more than doubling the market’s historical yearly average. Key leases on newly constructed buildings and built-to-suit projects drove much of the industrial absorption.

New Jersey's industrial market posted total positive net absorption of 1.7 million square feet in the final quarter of 2014, compared to 3.0 million square feet absorbed in the third quarter and approximately 1.8 million square feet of absorption in the second quarter.

A number of crucial transactions over the past year fueled the record-breaking absorption, including P. Judge & Sons Inc.’s commitment to 202,000 square feet at Hartz Mountain Industries Inc.’s 201 Bay Avenue in Elizabeth; Araka Sarcona Management Inc.’s renewal and expansion to 278,100 square feet at Charles Dunn Real Estate Services Inc.’s 125 Pennsylvania Avenue in Kearny; and Moulton Fulfilment’s lease with Prologis Inc. for 172,249 square feet at 200 Docks Corner Road in South Brunswick. One new transaction of note recorded in the fourth quarter of 2014 was SHI International Corp.’s lease of 305,7510 square feet of speculative space in the Exit 10 submarket, a positive sign for the entire market and evidence that demand is as strong as supply.

“In November, the country saw the largest monthly increase in jobs since 2011, reducing the unemployment rate to its lowest level since the recession,” said David Knee, Senior Managing Director at JLL. “Meanwhile, oil prices have hit five-year lows, pushing down prices at the pump nearly 30 percent over the past six months. Small business sentiment has reached seven-year highs, with businesses now citing taxes over sales as their biggest concern. Going into 2015, the combined effect of these positive economic factors could lead to an uptick in business expansion and consumer spending, giving way to an acceleration in new industrial lease signings throughout the state.”

Since climbing above 9.0 percent at year-end 2009, New Jersey’s overall industrial vacancy rate has trended lower through fourth-quarter 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 five consecutive quarters.

After New Jersey saw a record 3.7 million square feet of new industrial product added to the inventory in the third quarter, just one 550,000-square-foot facility in the Exit 8A submarket was delivered in the final quarter of the year. Approximately 1.78 million square feet remains under construction, most of which is speculative and expected to be delivered during the first half of 2015.

Capital markets activity in New Jersey remained strong in the fourth quarter. In one of the largest sales completed this quarter, TIAA-CREF acquired the 135,000-square-foot 680 Bellville Turnpike, currently occupied by PepsiCo, from Russo Development for $32.0 million or $237 per square foot. In addition, Stoltz Real Estate Partners purchased 300 Fairfield Road in Fairfield for $51.6 million or $123 per square foot. The 418,000-square-foot facility was sold by Fairfield BAB Group LLC.

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

  • The overall vacancy rate ticked downward slightly in the fourth quarter to 7.77 percent. In the past year, the industrial vacancy rate has decreased from 8.6 percent in the fourth quarter of 2013.
  • The average asking rental rate for Northern and Central New Jersey industrial space rose 1.5 percent to $5.70 per square foot this quarter from $5.62 per square foot in the third quarter of 2014. Average asking rents have increased 12.8 percent during the past year.

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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 $4.0 billion and gross revenue of $4.5 billion, JLL has more than 200 corporate offices, operates in 75 countries and has a global workforce of approximately 53,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.0 billion square feet, or 280.0 million square meters, and completed $99.0 billion in sales, acquisitions and finance transactions in 2013. Its investment management business, LaSalle Investment Management, has $53.0 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit​