- Market fundamentals continue to improve due to overwhelming demand for space, demographics, strong leasing velocity and historic vacancy rate lows. Total positive absorption for the first quarter was 3MSF (over 1MSF additional space absorbed year after year). Vacancy continued its downward trend to 3.9% and rental rates increased $0.15 or 2% in the first quarter (9% year over year, a 37% increased in less than five years).
- The raising of the Bayonne Bridge has allowed larger container ships to unload at the NJ/NY ports increasing the imports volume year over year by almost 13%.
- Ecommerce sales continue to be the driving force behind the red-hot industrial market from the likes of 3PL, logistic retailers and ecommerce distributors such as XPO, Amazon, TJ Maxx among others.
- Top lease transactions inked in 1Q18 include 459,000 SF by TJ Maxx, 369,000 SF by One Stop Logistics and 296,000 SF by XPO Logistics. Less than five facilities over 500,000 SF currently available in the market.
- Tenants should be prepared to pay a premium and act quickly to secure their facility, as availability is limited.
- Just shy of 2MSF was delivered in the first quarter and 12MSF is currently under construction.
- Grocery stores, restaurants, hair salons and urgent care centers are dominating the retail market. However, ecommerce is starting its trend back into the ‘brick and mortar’ arena.
- Class A office facilities are doing extremely well as of late, due to technology companies and good economic trends. Because of the lack of development, tenants looking for space will be forced to seek vintage inventory and landlords will be forced to reinvest in their buildings.
- The US economic outlook remains healthy, according to most economic indicators. 2018 is expected to be a prosperous year. The NJ unemployment rate dropped to 4.6%. According to the Bureau of Economic Analysis, the GDP increased at a annual rate of 2.3% in the first quarter, due to positive contributions from business spending on equipment, investments in home building, as well as exports.