Economy
- Prior to raising interest rates, the Federal Reserve is looking for more progress in the labor market and inflation objectives to be met. Soft growth data from the first few wintery months, due to port closures in the west and bad weather in the northeast, disrupted the annual growth rate. Recently,
the surge in the dollar has subdued exports and increased import demand. Consumer spending should increase slightly in the upcoming quarters due to the drop in oil prices but may dampen domestic exploration. - Dockworkers and their employees in the 1Q15 circumvented an economic crisis on the west coast by reaching a five-year contract, averting the shutdown of 29 ports that could have cost close to $2 billion per day.
- 12.5% of the GDP is represented through cargo that has moved through the west coast ports. The eventual cost of continual port delays may prove to be advantageous for the east coast ports to capitalize on.
- A proposed tax in NJ on stored empty containers was stricken from legislation.
- The Institute for Supply Management stated that economic activity in the manufacturing sector has increased for 27 straight months, while the overall economy has shown growth for over 60 months.
Office
- The office market remained steady at 17% with limited absorption. The largest signing was by Dun and Bradstreet Corporation at 103 JFK East Building in the Short Hills, NJ.
Retail
- The vacancy in northern NJ remains steady and healthy at 5.5% with a 150,688 SF positive absorption.
Industrial
- Following a sluggish start to 2015, the Northern and Central industrial markets of New Jersey have rebounded quite nicely. It’s vacancy decreased to 7.75% from 7.9% in the 4Q14. The average asking rental rates increased $0.03 to $5.96 in the 4Q14 ($0.20 rise from the 1Q14). The absorption for the 1Q15 was positive with over 1,375,000 SF (a 280% rise compared with the 1Q14).
- The port and NJ Turnpike remain a driving force for the NJ industrial market.
- Orders for goods produced in the US factories rose 2.1%, according to the Commerce Department.
- E-commerce and food delivery have quickly created an enormous demand for additional industrial
space in the market. By the end of the 2Q15, Amazon should land over 2.5MSF in our market.
