NEW JERSEY

Industrial Market Snapshot

Second Quarter 2015

Economy

NEW JERSEY
Economic Indicators
Q2 14

Q2 15

New Jersey Employment

3.24M

3.29M

New Jersey Unemployment

6.2%

6.0%

U.S. Unemployment

6.1%

5.3%

Q2 14

Q2 15

The New Jersey economy is being propelled by the economic

momentum of the country as a whole. Private sector
employment in the U.S. has grown by an average of more than
2.4 million jobs per year over the past 4 years. With incentive
programs that are fueling major transactions as well as
increasing investor confidence in the economy, the industrial
market was full of activity in the first half of 2015. Although
manufacturing is only a small subset of the total employment in
New Jersey, it is a large part of the states total economic output
and will continue to grow as New Jerseys industrial market
strengthens over the next 12 months.1

12-Month
Forecast

Market Indicators
Overall Vacancy

7.4%

6.4%

Net Absorption

-780,991

2,795,402

Under Construction

5.2M

3.0M

Average Asking Rent

$5.75

$5.85

12-Month
Forecast

Market Overview
Leasing activity in the Northern New Jersey industrial market
was robust in the second quarter 2015 resulting in a 40 basis
point decrease in vacancy to 6.9 percent quarter over quarter.
Absorption was recorded at 878,847 positive square feet, the
fourth quarter in a row posting positive absorption and the
highest recorded absorption since the third quarter of 2011.
Asking rents fell slightly to $6.33 per square foot quarter over
quarter, but were still an improvement compared to $6.09 per
square foot during the same quarter a year ago.

Net Absorption/Asking Rent

Net Absorption/Asking Rent

Four Quarter
Trailing Average
4Q TRAILING
AVERAGE
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
-500
-1,000
-1,500
-2,000

$6.40
$6.20
$6.00
$5.80
$5.60
$5.40
$5.20

Nine of the 10 submarkets in Northern New Jersey posted

positive absorption in the second quarter, with Meadowlands
and Hudson Waterfront leading the way. In the Meadowlands
submarket, vacancy declined to 5.5 percent from 6.1 percent the
previous quarter as Graham-Field Health Products leased
104,753 square feet at 33-49 Whelan Road and National
Packaging Services leased a 100,011-square-foot space at 1000
New County Road. In the Hudson Waterfront, vacancy declined
150 basis points with the leasing of the entire property at 150
Industrial Drive in Jersey City by Port Elizabeth Terminal
Warehouse.

$5.00
2010

2011

2012

Net Absorption, 000's

2013

2014

2015

Asking Rent, $ PSF

Overall Vacancy Rate

Overall Vacancy
11.0%
10.5%
10.0%
9.5%
9.0%
8.5%
8.0%
7.5%
7.0%
6.5%
6.0%
5.5%
5.0%
2010

2011

2012

2013

2014

Demand for industrial space is rising in Northern New Jersey

among the majority of industry sectors. The improvements in
the states transportation network, particularly progression in
the Port area, are key contributors to rising leasing activity in that
region. Increased demand will cause rental rates to rise over the
next six months, eventually reaching pre-recession levels.

2015

New Jersey Business Magazine

2

NEW JERSEY

Industrial Market Snapshot

Second Quarter 2015

Improvements in the states transportation

network, particularly progression in the Port
area, are key contributors to rising leasing
activity in that region.
points to 3.8 percent. Atlantic Beverages lease for 104,519
square feet at 450 Oak Tree Avenue and Kubras lease for 96,361
square feet at 30 Knox Drive were partially responsible for this
decline in vacancy. In the Exit 9 submarket, Williams Sonomas
lease at 2801 Route 130 for 318,750 square feet and Lasar
Logistics lease for 228,109 square feet at 5 Broadway Road
contributed to 267,578 positive square feet of absorption within
the submarket.

New Supply Industrial

NEW SUPPLY IS PROJECTED TO REACH ALMOST 2.5 MILLION SQUARE FEET IN 2015.

5000
4000

000s

The Exit 12 submarket was accountable for 58.5 percent of total

absorption in Central New Jersey for the quarter at 1.1 million
positive square feet. Amazons lease for 1.0 million square feet at
8003 Industrial Avenue in Carteret was the largest contributing
factor to an 830-basis-point drop in vacancy to 6.3 percent at
Exit 12. The lowest vacancy for the quarter was recorded in the
Western 287 submarket, which saw a decrease of 160 basis

NEW SUPPLY

3000
2000
1000

Historic Average = 658K SF

0
11

12

13

Outlook

Improvements in the states transportation network will

lead to increases in leasing activity within key markets.

Strong leasing activity will be fueled by rises in

consumer confidence as the market improves.

I ncreased demand for quality industrial space will lead

to increases in rental rates over the next 6 months.

15 16

VACANT SPACE

Vacant Space Industrial

DIRECT VACANT SPACE DECREASED BY APPROXIMATELY 17.9 MILLION SQUARE

FEET OVER THE PAST 5 YEARS.
50
45
40
35
30
25
20
15
10
5
0

2.6

3.0

2.5
2.3

1.6

1.9

42.6

41.3
35.4

33.6

32.8
24.9

Q2 10

Q2 11

Q2 12
Relet

Amazons decision to lease 1 million square feet in Carteret this

quarter among other large deals demonstrates tenants
confidence in the Central New Jersey industrial market. This
strong consumer confidence will continue well into the next year
as tenants take advantage of the healthy industrial market and
vacancy declines even further.

14

MSF

As well as the Northern New Jersey industrial market performed

in the second quarter of 2015, the Central New Jersey industrial
market managed to outshine it, posting 1.9 million square feet of
positive absorption and a 100 basis point decline in vacancy to
5.9 percent. Asking rents were up slightly to $5.23 per square
foot compared to $5.18 the previous quarter. Over 2.5 million
square feet of leasing activity was responsible for the strong
market performance in the second quarter.

Q2 13

Q2 14

Q2 15

Sublet

WAREHOUSE/FLEX ASKING RENTS

Warehouse/Flex Asking Rents

WHILE WAREHOUSE RENTS SHOWED A SLIGHT UPTICK TO $5.59 PSF IN THE

SECOND QUARTER, FLEX RENTS DECLINED BY $0.86 TO $9.68 PSF.
$12.00
$11.00
$10.00
$9.00
$8.00
$7.00
$6.00
$5.00
$4.00
$3.00
$2.00
$1.00
$0.00
2010

2011

2012
Warehouse

2013

2014

2015

Flex, $ PSF

www.dtz.com | 2

NEW JERSEY

Industrial Market Snapshot

Second Quarter 2015

FEATURED SUBMARKETS
NORTHERN NEW JERSEY
Central Bergen
Eastern Morris
Hudson Waterfront
Meadowlands
Northern Bergen
Passaic/Routes 23 & 46
Port/Airport
Union County
West Essex
Western New Jersey
Northern NJ Total
CENTRAL NEW JERSEY
Exit 7A
Exit 8A
Exit 9
Exit 10
Exit 12
Western 287
Monmouth County
Ocean County
Somerset County
Central NJ Total
New Jersey Total

TOTAL
BLDGS INVENTORY
116
13,120,313
175
21,112,804
89
16,312,120
436
60,609,350
133
12,599,566
241
29,180,078
130
22,197,697
182
22,729,173
110
9,789,589
106
15,764,987
1,718 223,415,677
35
225
109
238
79
145
87
63
165
1,146
2,864

11,226,566
56,918,970
16,752,150
40,773,357
13,771,196
17,823,090
10,323,183
5,796,483
19,758,976
193,143,971
416,559,648

DIRECT VACANT
AVAIL
697,697
1,928,412
982,902
3,106,942
1,129,916
819,185
1,493,788
2,493,466
568,214
679,429
13,899,951

TOTAL VACANT
AVAIL
697,697
1,928,412
1,107,835
3,359,903
1,237,916
819,185
1,498,788
2,534,166
721,364
1,262,010
15,167,276

517,699
2,690,747
1,190,322
2,912,093
864,164
598,519
422,234
304,407
1,335,419
10,835,604
24,735,555

517,699
2,909,447
1,190,322
3,016,818
864,164
684,091
422,234
306,407
1,512,809
11,423,991
26,591,267

VACANT
CURRENT NET
AVAIL RATE ABSORPTION
5.3%
60,249
9.1%
70,726
6.8%
253,046
5.5%
330,253
9.8%
(87,486)
2.8%
235,325
6.8%
(140,095)
11.1%
97,701
7.4%
184,140
8.0%
46,988
6.8%
1,050,847
4.6%
5.1%
7.1%
7.4%
6.3%
3.8%
4.1%
5.3%
7.7%
5.9%
6.4%

230,288
(58,722)
267,578
(45,188)
1,120,730
275,495
34,691
26,933
64,750
1,916,555
2,967,402

YTD NET
ABSORPTION
109,427
87,031
585,146
273,534
(67,452)
(40,742)
(140,195)
352,141
190,316
481,084
1,830,290
292,984
(144,004)
136,976
(12,039)
1,561,392
481,084
8,541
9,433
(138,000)
2,196,367
4,026,657

UNDER
AVERAGE ASKING
CONSTRUCTION
RENT
$6.68
$5.95
315,000
$5.46
634,035
$6.36
$8.62
$4.74
$6.16
$5.78
$9.64
180,000
$6.36
1,129,035
$6.35
436,643
695,072
740,384
1,872,099
3,001,134

$4.50
$4.88
$4.18
$5.94
$6.14
$5.19
$6.43
$5.96
$4.51
$5.23
$5.86

Data includes all industrial and flex buildings at least 50,000 square feet in total rentable building area.
Market Statistics may vary from previous quarter as submarkets were re-evaluated and updated for accuracy.
Availability is all properties being marketed as available.
Vacant available is all properties that are marketed as both vacant and available.

Key Lease Transactions 2Q 15

PROPERTY

SF

TENANT

TRANSACTION TYPE

SUBMARKET

8003 Industrial Avenue

1,064,515

Amazon

Lease

Exit 12

23 Mack Drive

359,950

Romark Logistics of NJ, LLC

Renewal

Exit 10

2801 Route 130

318,750

Williams Sonoma

Lease

Exit 9

5 Broadway Road

228,109

Lasar Logistics

Lease

Exit 9

699 Kapkowski Road

212,545

ShipCo

Renewal

Port/Airport

40-50 Seaview Drive

178,516

ZT Systems

Lease

Meadowlands

PROPERTY

SF

SELLER/BUYER

PRICE

SUBMARKET

200 Milik Street

232,000

The Hampshire Companies/TIAA-CREF

$49,500,000

Exit 12

1800 Lower Road

386,000

Waitex/CenterPoint Properties

$36,208,398

Port/Airport

55 Shepherd Lane

172,531

55 Shepherds Realty LLC/Sitex Realty Group

$8,927,000

Passaic/Routes 23-46

121 Market Street

114,680

Aee Real Estate Holdings/141 Market St

Realty LLC

$8,250,000

Union County

Key Sales Transactions 2Q 15

www.dtz.com | 3

NEW JERSEY

Industrial Market Snapshot

Second Quarter 2015

Industrial Submarkets
New Jersey

513
511

NORTHERN BERGEN
513

17

CENTRAL BERGEN

PASSAIC
80

EASTERN MORRIS
287

WESTERN NJ

WEST ESSEX
510

MEADOWLANDS

513

UNION COUNTY

512

HUDSON
PORT/ WATERFRONT
AIRPORT

78

I-78 WEST

22

31

SOMERSET COUNTY

EXIT 12

EXIT 10

202

De

law

are

EXIT 9

R.
31

1
9
95

MONMOUTH COUNTY

EXIT 8A

95

EXIT 7A
195

OCEAN COUNTY

72

Liliya Magid
Research Analyst

About DTZ
DTZ is a global leader in commercial real estate services providing occupiers, tenants and investors around
the world with a full spectrum of property solutions. Our core capabilities include agency leasing, tenant
representation, corporate and global occupier services, property management, facilities management,

26 Main Street
Suite 202
Chatham, NJ 07928
Tel: 973 908 6118
Email: liliya.magid@dtz.com

facilities services, capital markets, investment and asset management, valuation, building consultancy,
research, consulting, and project and development management. DTZ manages 3.3 billion square feet and
$63 billion in transaction volume globally on behalf of institutional, corporate, government and private
clients. Our more than 28,000 employees operate across more than 260 offices in more than 50 countries
and proudly represent DTZs culture of excellence, client advocacy, integrity and collaboration. For further
information, visit: www.DTZ.com or follow us on Twitter @DTZ.

The information contained within this report is

gathered from multiple sources considered to
be reliable. The information may contain errors
or omissions and is presented without any
warranty or representations as to its accuracy.
Copyright 2015 DTZ.
All rights reserved.

www.dtz.com | 4