MAHWAH, NJ—Northern Bergen County may be getting a new look in the new year as industrial developers scramble to feed the continuing explosion in demand for warehouse and distribution space with short road hauls in the New York metropolitan area.
“Universally, there is a serious lack of new product in the market,” says Kenneth D. Lundberg, SIOR, a senior vice president with NAI James E. Hanson. “Ground is very tough to find, and when you can find it and build a building, the area has gotten very expensive.”
In a recent blog post for NAI Hanson, Lundberg argues that traditional close-in markets like the Exit 8A Turnpike submarket and the West Essex area “are having a difficult time keeping up with demand and industrial users are looking elsewhere for opportunities in newer markets as their property prices creep up and inventory becomes scarce.”
Listen to our complete audio interview with Ken Lundberg in the player below.
In Mahwah, one development site proved attractive.
“We could build a modern building with all the amenities we need, and we could do it about two bucks a foot cheaper than the close-in areas,” he says. The confluence of major highways such as Route 17, and Interstates 87 and 287 makes the location even more attractive, Lundberg believes.
The area also has lower labor costs and highly skilled workers, he says.
“We can find very high-end technical labor, and line-type workers, being on the border of four counties, Begen, Passaic, Orange, and Rockland, gives us a good advantage,” he says.
Drayage charges in the Mahwah area are significantly lower than in the Turnpike submarkets, says Lundberg.
The principal development site in Lundberg’s crosshairs is the former headquarters of Sharp Electronics, which was built on the site of a Ford Motor Co. assembly plant that closed about 25 years ago. The site, in what is now called the Stateline Business Park at Sharp Plaza, includes an office building and a fully leased warehouse.
Sharp has relocated to Montvale, the office building is being retrofitted for Jaguar’s corporate headquarters, and Hanson now is working with Sitex Group on the development of vacant space on the property into a 271,000 square-foot class-A industrial space expected to be ready in the first quarter of 2018.
Located directly off I-287 and Route 17, the new 100 Performance Drive will have 36-foot clear ceiling heights, 54 foot by 60 foot column spacing, 36 dock doors, ESFR sprinklers, two drive-ins and parking for 25 trailers and 184 cars, all within an hour’s drive to New York City.
“That’s the one that’s gotten the market’s eye, and that we’ve had a lot of activity on,” he says.
As pricing hardens in the port submarkets and users feel pressure to make site selection decisions, Northern Bergen County might attract additional attention, as the industrial business shows no signs of retrenchment.
“Users are looking for hard delivery days,” Lundberg says. “When we started marketing the Mahwah property, things were a little slow, but as soon as we put a shovel into the ground, we started getting proposals coming in on a regular basis. I think that is evidence of a shortage of quality product, and I see no reason for this cycle to slow down at this point.”