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News release


Strong Demand for Industrial Space in New Jersey Drops Vacancy to 5% at Midyear 2016

Developers building 2.3 million square feet of industrial space to meet demand; new supply expected to reach 4.5 million square feet by year-end

EAST RUTHERFORD, N.J., July 6, 2016 — Industrial leasing activity in Northern and Central New Jersey in the first half of 2016 remained significantly above historic levels, particularly at Class A properties, according to JLL.  Net absorption at midyear reached 5.2 million square feet, putting 2016 on track to be one of the best for New Jersey's industrial leasing.

Strong demand for high-quality industrial assets in Northern and Central New Jersey pushed overall vacancy rates down to 5.0 percent in the second quarter of 2016. Tenant activity was particularly strong within the Exit 8A submarket, where 3.5 million square feet of leasing activity was recorded this quarter, accounting for 38.8 percent of total leasing activity for Central New Jersey. Noteworthy transactions signed at midyear 2016 include Wayfair LLC leasing 1.24 million square feet at 48-50 Station Road in Cranbury, and NJ-Cal Warehouse Expediters LLC inking a deal for 324,340 square feet at 26 Engelhard Avenue in Monroe.

"New demand for large Class A spaces continued to be driven by e-commerce and last-mile delivery companies," said David Knee, Senior Managing Director at JLL. "In particular, Amazon, FedEx and UPS have been vigorously leasing space in the first half of 2016. FedEx and UPS alone leased a combined 1.5 million square feet this year, with most of those transactions expansions within the market and new requirements."

Average asking rental rates continue to accelerate for all industrial asset classes. Rates have increased 19.3 percent since 2012 and are now less than 1.0 percent from the historical high of $6.30 per square foot.

Construction activity continued at an elevated rate in the second quarter of 2016, with 14 projects, totaling 2.3 million square feet, underway. With several developers considering breaking ground on 1.0 million square feet of speculative projects, construction activity is expected to remain elevated during the next 12 months.

Knee continued, "We anticipate new deliveries will reach 4.5 million square feet by year-end 2016, making it the second-best year for new construction this cycle — just behind 2014, when more than 8.0 million square feet of new construction was recorded."

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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 $5.2 billion and gross revenue of $6.0 billion, JLL has more than 280 corporate offices, operates in more than 80 countries and has a global workforce of more than 60,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 4.0 billion square feet, or 372 million square meters, and completed $138 billion in sales, acquisitions and finance transactions in 2015. Its investment management business, LaSalle Investment Management, has $58.3 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