Skip Ribbon Commands
Skip to main content

News release

EAST RUTHERFORD, NJ

Strong Deal Velocity Fuels Drop in Industrial Vacancy Rates at Midyear 2015

Users have leased more than 10.0 MSF of New Jersey industrial product in past six months


EAST RUTHERFORD, N.J., August 4, 2015 — JLL reported that substantial leasing activity within New Jersey’s industrial real estate market lowered vacancy rates throughout the state. Year-over-year, the overall vacancy rate for Northern and Central New Jersey fell 60 basis points to 7.2 percent in the second quarter of 2015. The market’s vacancy rate is expected to decrease noticeably during the next six months as leases involving large blocks of space take effect and new speculative deliveries remain limited.

Following a record-breaking year for Class A speculative development, Central and Northern New Jersey witnessed a spike in leasing activity for Class A warehouse/distribution space during the past six months. Year-to-date, the market has posted 10.8 million square feet in deal volume, with 5.6 million square feet of that amount recorded this quarter.

New Jersey's industrial market posted total positive net absorption of 2.4 million square feet in the first six months of the year, outpacing the first two quarters of 2014, when the state saw 2.05 million square feet of positive net absorption. Northern New Jersey continued to benefit from the majority of the state’s net absorption and leasing activity. This quarter marked the ninth consecutive quarter of positive net absorption in Northern and Central New Jersey.

Transactions in the Exit 12 submarket totaled 1.4 million square feet in the second quarter, with Amazon.com Inc.’s 1.0 million-square-foot lease at 8003 Industrial Avenue in Carteret accounting for the majority of that total. This deal was the largest lease signed in New Jersey in nearly two years. Several other large transactions helped stabilize the Exit 12 submarket, including Panalpina World Transport Ltd. taking 166,000 square feet and MXD Group signing for 177,000 square feet at Prologis’ Port Reading Business Park in Woodbridge. In addition, Shipco Transport renewed its 282,000-square-foot lease at 699 Kapkowski Road in Elizabeth, located in the Port submarket.

Investment sale activity remained strong in the second quarter of 2015, aided by Prologis’ acquisition of KTR Capital Partners.
“Institutional demand continues to be the biggest driver of sales activity, as investors increasingly turn to industrial real estate for stable yield,” said David Knee, Senior Managing Director at JLL. “As a result of increased institutional demand, average Class A cap rates have continued to compress and now trade between 5.25 percent to 5.0 percent on average.”

Other highlights from JLL’s second-quarter 2015 industrial market report include:
• Year-over-year, the overall vacancy rate declined 60 basis points to 7.2 percent in the second quarter of 2015.
• The Northern and Central New Jersey average asking rental rate rose 1.1 percent from midyear 2014 to $5.66 per square foot one year later.

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.

JLL is a leader in the northern/central New Jersey commercial real estate market, with more than 800 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. JLL’s New Jersey operations were honored by NJBiz magazine as one of its 2015 Best Places to Work 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. A Fortune 500 company with annual fee revenue of $4.7 billion and gross revenue of $5.4 billion, JLL has more than 230 corporate offices, operates in 80 countries and has a global workforce of approximately 58,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.4 billion square feet, or 316 million square meters, and completed $118 billion in sales, acquisitions and finance transactions in 2014. Its investment management business, LaSalle Investment Management, has $56.0 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 www.jll.com.