Oftentimes, when a region sees more construction activity, it will lead to more unused space. That's what we're seeing in New Jersey's industrial space.
A new market analysis report from NAI James E. Hanson that looked at the northern and central markets in the state, revealed that the vacancy rate ticked up to six percent at the end of 2024, compared with 4.7 percent in the same period in the previous year. Nearly 12 million square feet of construction was added to the inventory last year, with 9.5 million delivered as vacant.
"Available space in new construction has kept absorption in negative territory over the last seven quarters. In addition to offerings from new construction, the amount of sublease space rose throughout the year, reaching a historical high," NAI wrote.
"Sustained demand from logistics and distribution firms and 3PL companies have helped to temper the rise in vacancy."
Brunswick/Exit 9 and Hunterdon generated the highest vacancy levels, at 9.5 percent and 9.4 percent, respectively. Northern Bergen and Suburban Essex had the lowest, with vacancies of just 3.6 and 3.1 percent, respectively.
The top sale involved TA Realty's acquisition of a 1.4 million square feet 17 property portfolio from Link Logistics for $239.1 million. That was followed by Ambient Capital Partners' five-property purchase (502,000 square feet) of Supor Industrial Park for $131.3 million. The top lease involved LeCangs' 845,280 square foot deal at 1900 River Road Bldg.
According to NAI, asking rates "remain steady" at $14.06 per square foot.
Following 2025, NAI expects deliveries to decline "sharply." However, it warned that until that happens the industrial market in the regions could be negatively impacted by a disruption to the supply chain and possible tariffs, which President-elect Donald Trump has proposed.