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News release

EAST RUTHERFORD, NJ

New Jersey Industrial Absorption Reaches 2nd Highest Level in More Than 10 years

Northern, Central New Jersey posted 3.9 million square feet of positive absorption in 4th quarter of 2015, accounting for 52% of state’s 2015 total


EAST RUTHERFORD, N.J., January 27, 2016 — New Jersey's industrial market posted 7.5 million square feet of positive absorption in 2015, resulting in one of the best years in more than a decade. Building on the momentum in the first three quarters, net absorption in the fourth quarter reached 3.9 million square feet, accounting for 52.0 percent of the 7.5 million square feet of positive net absorption recorded for the year.

As a result of fervent Class A leasing activity throughout the state, the vacancy rate in Northern and Central New Jersey fell to 6.5 percent, the lowest level since 2001. Contributing to the cycle-long lows in late 2015 was LIST Logistics’ lease of 571,000 square feet at 75 Mill Road in Edison and Serta’s lease of 460,000 square feet at 50 Bryla Street in Carteret.

An influx of foreign capital drove industrial sales in Northern and Central New Jersey to historic levels in 2015. Sales volume for warehouse product in the state totaled $9.0 billion, representing a 56.1 percent increase over the previous year, and a 118.0 percent increase over the 10-year historical average.

Developers throughout New Jersey have ramped up speculative development projects to take advantage of the growing demand, declining vacancy rates and rising rental rates. In the final quarter of the year, construction starts totaled more than 1.3 million square feet, bringing the total volume of industrial product underway to 3.2 million square feet, with more than 75.0 percent speculatively constructed. Developers continued to focus construction in the Exit 8A submarket where vacancy has dropped below 4.2 percent. The largest project currently underway in this submarket is Alfieri and Rockefeller Group’s joint venture at 48-50 Station Road in Cranbury. The 930,000-square-foot site is the only building of its size currently available, with anticipated delivery in the first half 2016. With this project and many others expected to deliver during the next 12 months, vacancy rates could see renewed upward pressure as large amounts of supply hit the market in 2016.

“Developers are breaking ground at an accelerated rate, after the majority of available Class A space was leased in 2015 ” said David Knee, senior managing director at JLL. “Nearly 4.0 million square feet of Class A space was leased during the last six months in New Jersey. While plenty of demand remains in the market, available Class A space is extremely limited, hampering continued Class A leasing activity at such a rapid pace.”

Other highlights from JLL’s fourth-quarter 2015 industrial market report include:

• Year-over-year, the overall vacancy rate declined 50 basis points to 6.5 percent in the fourth quarter of 2015.
• The Northern and Central New Jersey average asking rental rate rose 2.0 percent from fourth quarter 2014 to $5.82 per square foot at year-end.

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 1,000 professionals and support staff providing agency leasing and property marketing, tenant representation, industrial services, strategic consulting, occupancy planning, workplace strategies, project and development services, property and facility 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 a local service provider for JLL’s 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 $57.2 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.​