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News release

Hasbrouck Heights, N.J.

New Jersey Industrial Market Shows Signs of Stability in Fourth Quarter 2010

Activity in food/beverage industry, combined with Steady growth of ports, leads to positive net absorption


HASBROUCK HEIGHTS, N.J., Feb. 3, 2011 — New Jersey’s industrial market is stabilizing, according to Jones Lang LaSalle. The firm’s Q4 2010 New Jersey industrial report shows that positive net absorption in the fourth quarter kept year-to-date absorption in positive territory. While leasing velocity is still off its peak level, the number of completed deals increased from the previous quarter.

The increase in leasing activity was led by demand for small space leasing in Northern New Jersey. Rising demand for 20,000 to 40,000-square-foot buildings in the Meadowlands market is expected to impact the absorption and vacancy rates positively in coming quarters.

“Firms in the food/beverage industry continued to be the most active in the marketplace,” said Rob Kossar, Managing Director at Jones Lang LaSalle. “Leading the demand for industrial space, consumer-driven industries are attracted to New Jersey because it provides excellent access to all markets in the region.” 

In Central New Jersey, the positive absorption was driven by new and existing tenants taking advantage of the window of opportunity for lowering their occupancy costs. Third-party logistics providers and home furnishing companies, which often require large blocks of space, continued to be active in the Central New Jersey market, where modern facilities are abundantly available.

“In Central New Jersey, tenants are seeking to take advantage of current market conditions by looking to reduce their in-place rents, and are in search of opportunities for better space at lower rents — a trend that’s expected to continue in 2011,” Kossar added.

Additionally, Port Newark/Elizabeth activity strengthened as overall container volume increased by 12.6 percent in total volume from January to November 2010, compared to the same period in 2009.

“The Port Authority of NY/NJ has announced a plan to raise the Bayonne Bridge to accommodate new and larger cargo ships,” noted Kossar.  “And, access to the New York Metropolitan Area markets is drawing food and beverage companies, illustrated by a recent transaction by a food distributor, which relocated from New York City to lease more than 200,000 square feet in Linden.”
 
Highlights from Jones Jang LaSalle’s Q4 2010 industrial market report include:

• The overall vacancy rate for New Jersey was 12.7 percent at the end of Q4 2010, down 0.7 percent from the 13.4 percent vacancy rate at the end of Q3 2010. The vacancy rate at the end of Q4 2010 was 11.25 percent.

• Average asking rents in New Jersey were $5.03 at the end of Q4 2010, compared to $5.11 at the end of Q3 2010. Average asking rents in Northern New Jersey were $5.60 at the end of Q4 2010, down .18 cents from the end of Q3 2010. Average asking rents in Central New Jersey were $4.32 at the end of Q4 2010 in Central New Jersey, unchanged from Q3 2010.

• There were 269 industrial lease deals executed, including new leases and lease renewals, in New Jersey during Q4 2010. Industrial transactions in Q4 2010 totaled 6.7 million square feet.

Jones Lang LaSalle’s team of in-house research professionals compiled the Jones Lang LaSalle Q4 2010 New Jersey industrial report, which provides an extensive analysis of the New Jersey industrial property market.

Jones Lang LaSalle’s Industrial Services Group is the leader in industrial services in New Jersey based on total leasing transaction volume. Jones Lang LaSalle is also a leading commercial real estate services provider in New Jersey, ranking within the top 3 in office brokerage, project management and investment sales in the State.  The firm boasts more than 300 real estate professionals and support personnel, which provide industrial brokerage, supply chain logistics advisory, office landlord and tenant representation, strategic consulting, project and property management and investment sales services to many of New Jersey’s leading corporate tenants, investors and landlords.
 
About Jones Lang LaSalle

Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2010 global revenue of more than $2.9 billion, Jones Lang LaSalle serves clients in 60 countries from 750 locations worldwide, including 180 corporate offices.  The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 1.7 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with more than $41 billion of assets under management. For further information, please visit our website, www.joneslanglasalle.com.