- The end of year shaped up to be optimistic with GDP close to 3%, construction spending up, employment growth solid, and consumer confidence healthy. The average leasing rate ($7.31 PSF NNN) increased over 46% on average within the last five years. In submarkets, such as the Meadowlands, leasing rates have increased almost 100% which is a concern to many companies coming up for renewal. The vacancy rate decreased 60% in that same five-year period to 4%.
- Strong demand for industrial space, fueled by e-commerce led to an historic amount of construction volume. An additional 9MSF was delivered (3.2MSF of which was delivered in the 4Q17). The vacancy rate is 0% for big-box facilities available over 500,000 SF.
- Over 12.5MSF is currently under construction. Majority of the absorption came from Interchange 8A area to such companies as Home Depot, Wayfair, LG Electronics.
- Entertainment, food and experimental recreational opportunities may be the way retail establishments embrace the future to keep people coming out. The vacancy rate rises to @ 6.5%.
- Leasing velocity is up slightly and vacancy levels remained steady, however corporate mergers and acquisitions may create additional negative absorption in the future. Transit-oriented areas and certain clusters in New Jersey, such as the Short Hills-Summit and Newark office markets continue to see growth. Tenants looking for upgraded amenities & beneficial working environments.
- Job productivity will be a key factor in the years to come. The US economy will continue to grow at a steady pace barring any global adversity.
- US unemployment held steady at 4.1% however NJ unemployment rose from 4.7% to 5.0% according to the Bureau of Labor Statistics.
- Consumer confidence remains strong. Retail sales climbed to 4.9%; online retail increased 18.1%. The overall consumer buying during the holiday period set a record for dollars spend according to the sales report issued by MasterCard spending Pulse.