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News release


New Jersey On Pace to Record 10.0 MSF in Positive Net Absorption in 2016

Falling vacancy rates, rising rents fuel five new speculative industrial projects totaling 2.2 MSF

EAST RUTHERFORD, N.J., October 13, 2016 — Industrial leasing velocity in Northern and Central New Jersey continued at a historic rate, particularly for Class A properties, according to JLL. Year-to-date net absorption reached 8.1 million square feet, putting the state's industrial market on pace to record 10.0 million square feet of positive net absorption for the first time since 2001.

Strong demand for high-quality industrial assets in Northern and Central New Jersey pushed overall vacancy rates down to 4.6 percent in the third quarter of 2016. During the past 24 months, the state's overall vacancy rate has plummeted 320 basis points from 7.8 percent in the third quarter of 2014.

"Landlord optimism throughout New Jersey has reached new highs, as demonstrated by the swift rise of asking rents and a statewide increase in speculative development," said David Knee, Senior Managing Director at JLL. "Unlike the last wave of speculative development in 2014, where downtimes for the majority of speculative deliveries were longer than anticipated, in 2016 and 2017, projects are expected to deliver with more limited downtimes as a result of all-time low vacancies and historic levels of tenant demand."  

With vacancy rates for Northern and Central New Jersey industrial space remaining at all-time lows, average asking rental rates are poised to break through previous peaks set in 2008. At the end of the third quarter, overall asking rental rates reached $6.34 per square foot, less than 0.5 percent below the previous high water mark.

Industrial construction activity continued at an elevated rate in the third quarter, with 18 projects underway, totaling 4.2 million square feet, including 3.3 million square feet of speculative development. That figure includes the five new speculative industrial projects, totaling approximately 2.2 million square feet that broke ground this quarter.

The largest of the new speculative projects, and the largest availability in the market, is Seagis Property Group's 923,000-square-foot distribution facility on Lincoln Highway in Edison. The Exit 10 submarket has become the epicenter of new construction this year. The Exit 8A submarket came in a close second, with 2.0 million square feet delivered during the past nine months, with the majority of that space now leased. Most recently, Bridge Development Partners delivered the 488,800-square-foot Bridge Point South Brunswick Manor in South Brunswick. The distribution facility was pre-leased to two tenants. Construction velocity at Exit 8A is likely to increase at an accelerated rate as Clarion Partners is expected to break ground on a 992,043-square-foot speculative development project in the fourth quarter.

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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 $59.1 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