NJ Q3 Industrial Report: Vacancy Rises While Sales Remain Constant

The New Jersey industrial real estate market remained strong in the third quarter of 2023, but there are signs that it is starting to normalize after several years of rapid growth.

A new study and its results: NAI James E. Hanson, a New Jersey-based commercial real estate firm, has released its report on the industrial real estate market for the third quarter of 2022. The report includes data on leasing and sales activity for key industrial submarkets in the state.

The report’s highlights:

• Demand: Demand for warehouse and distribution space remains high, driven by e-commerce and third-party logistics (3PL) firms.

• Supply: The addition of new supply in recent construction completions, coupled with an increase in sublease space, has led to a rise in the overall vacancy rate to 3.8%.

• Rents: Average asking rents continued to rise, but at a more measured pace than they have over the last few years. The highest rents are in the Ports and Meadowlands submarkets, where average rates are over $16.50 per square foot.

• Leasing: Leasing activity was slightly higher than the same time last year, but absorption was significantly lower, and the vacancy rate moved higher.

• Sales: Investors remain interested in buying industrial properties, and the average price per square foot maintained upward momentum, finishing the quarter at $260 per square foot.

Overall, the New Jersey industrial real estate market remains healthy, but it is important to note that some trends are starting to moderate. As the market normalizes, it is likely that we will see a slowdown in rent growth and an increase in the availability of space.

You can view the full NAI James E. Hanson report here.