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The New Jersey industrial market continued its record-setting trend set last year servicing the largest population concentration in the country. Despite the supply constraints the net absorption registered 2MSF, the lease rate increased to $12.00 PSF NNN overall and pushed the vacancy rate ever downward to a historic level of 2.3%.
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Demand for space continued to push rents, most prominently along the NJ Turnpike which is evident in the lack of available space. Tenants have looked toward less expensive options such as the tertiary markets off Route 24, 280, 80, 33, 18, and 46.
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Developers have ramped up the construction pipeline to keep up with the activity. Some speculative developments include Morris Companies’ 1.2MSF in Avenel, Rockefeller 345ksf in Easthampton, Lincoln Equities 332KSF in Jersey City, Bridge’s 358KSF in Belleville, amongst others.
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With the scale of war in Ukraine, inflation, and the Covid pandemic, the country may be looking toward a future recession. The war has created a food shortage (wheat) for countries such as South Africa and Egypt, among others, and companies have scaled up quickly to meet new demand, but recessionary trends could lead to a market downturn.
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Shippers are moving up their peak shipping season into late June to avoid delays and last year’s substantial container backups, but this introduces a new potential issue as this new peak coincides with back-to-school and other seasonal imports. Managing this process will go a long way toward showing the White House is making strides against a fragile economy and rising inflation.
