2nd Quarter 2020

Industrial Trends

CoVid-19 Update

  • The pandemic is evolving every day and its ultimate impact is not yet clear. Similar to the Spanish flu in 1918, this virus has generated a shockwave that has halted the global economy. Each state as well as the White House administration have been working diligently to ‘flatten the curve’ by social distancing, stay at-home measures, among others. Medical and other first responders have been risking their lives each day to continue the supply chain and keep people healthy. To stay up to date visit the CDC’s website: https://www.cdc.gov/coronavirus/2019-ncov/index.html


  • The industrial market has performed remarkably well throughout the pandemic with vacancy levels remaining stable, rental rates climbing and quarterly net absorption ascending upward.
  • With most of the brick and mortar stores shut down, people were forced to order their goods online which spurred many of the ecommerce logistic companies to increase their footprint.
  • Rent growth the last five years averaged close to 7% annually, however with the current surge for space from the ecommerce companies, that percentage could rise fairly quickly.
  • Vacancy rates remained below national averages with most submarkets pertaining to Big Box warehouses below 3%.

Port Volume

  • Trade volumes were hit hard by the pandemic, declining 16.3% year over year when it processed 511,306 industry-standard 20-foot equivalent containers.
  • It is seeking $3B in federal assistance as it anticipates ongoing damage.

Retail Trends

  • As the pandemic continued, vacancy levels among community, power, lifestyle and strip centers collectively rose. This should linger throughout the third and fourth quarters as more and more people trend toward using ecommerce. Essential stores such as grocery centers and home improvements have done quite well throughout, others not so much.
  • Rental rates ticked slightly upward which is not uncommon when vacancy levels rise. It is the common “hold the line” landlord defense. Rates will start to come down in the third and fourth quarters.

Office Trends

  • Despite new leases being signed (downward trend) renewals ran high. Leasing activity was slightly more active in the last month of the quarter and should continue throughout the third quarter.

Multi-Family Trends

  • While vacancy expansion continued in the first half of 2020, the pandemic has affected Northern New Jersey less harshly than other metros, particularly expensive, high density markets. Vacancy increased in the first quarter due to supply additions, but vacancies have surprisingly compressed in the second quarter, according to CS summary.

Economic Trends

  • Downward pressure has been placed on wages and prices as a result of high unemployment and excess capacity. We are facing grocery inflation, according to statistics released by Nielsen.
  • The economic landscape continues to be dominated by historic declines in just about every significant category.
  • Despite horrible economic data, the equity market rallied at the end of the first quarter.
  • On top of the CARES Act, which will provide $2.3 trillion in fiscal stimulus, the Federal Reserve has expanded its balance sheet by $2.4 trillion to over $6 trillion.
  • Due to the CoVid-19 events and incredible amount of loss of jobs, the 2Q20 could see one of the largest dips in GDP in US history.