- The unemployment rate for NJ has grown 0.8 percentage points since its post peak low of 4.3% in February of 2016, however it is still 4.5 percentage points lower than its peak in October of 2009.
- Outlook: not seeing weakness in the upcoming quarters, rental rates and consumption remain healthy.
- Despite the slow field, the market fundamentals continue to improve. Class A facilities in certain markets with mass transit (i.e. Short Hills, Hudson Waterfront, Newark downtown) continue to experience a resurgence in rental growth and strong leasing velocity.
- Demand for space in the markets mentioned above and other areas with mass transit should continue to see the availability narrow.
- Look for financial, legal, education and health services, as well as, trade, transportation and utilities, to experience higher employment and solid improvement.
- Consolidating online services are growing at an unprecedented pace, while bricks and mortar remain relatively flat. According to the Census Bureau of the Department of Commerce, retail e-commerce sales increased 15.8% from the second quarter of 2015 and total retail sales were estimated to increase 2.1%. In retrospect, Amazon’s revenue jumped 31 percent to $30.3 billion.
- The industrial real estate market continues its unprecedented surge, as rental growth, leasing velocity and sales power us through the second half of the year.
- Key indicators such as e-commerce logistics, the last mile delivery service, and food related companies have helped drive the submarkets of NJ led by the Meadowlands, Exit 8A and the port area.
- Port of NY/NJ to handle largest contain ship in port history – American Shipper
- Compared to the 1Q16, imported TEUs improved close to 7%, exported TEUs loads increased +/-5%, and total TEUs grew 2% consistently each quarter.
- Due to the feverish demand, vacancy rates have also lowered to 5.95%, while asking rental rates continued to accelerate its pace (up $0.09 PSF), as available space diminish and the absorption continues to break over 2 MSF.
- To meet the current demand, developers have ±4.5 MSF under construction, however they have outlaid more of a constricted building spree unlike other cycles where it was over built rather quickly. There were +/-2.4 MSF of deliveries closed for the quarter.