Market Posts 24th Consecutive Quarter with Positive Absorption in Q4Due to Strong Demand for Quality Industrial Space
Today, CBRE released its Q4 2022 Figures for the Northern and Central New Jersey industrial markets, which closed the year on a high note with a record-lowavailability rate of 4.1%, 6.1 million sq. ft. of positive absorption and 19.9 million sq. ft in total leasing activity. During Q4, leasing totaled 5.36 million sq. ft. and positive net absorption of 2.5 million sq. ft. Northern and Central New Jersey’s Class A average industrial rents ended the year at $19.02 per sq. ft., up 3.4% from the prior quarter and 8% year-over-year.
However, the delivery of two large Class A buildings in Central New Jersey without pre-leasing caused the market’s Class A availability rate to climb 70 basis points (bps). Annual leasing was down 22% compared to 2021 due to fears of an economic recession and lack of quality industrial space available to meet tenants’ needs.
“While New Jersey’s industrial market remained strong in 2022, fears of a recession, climbing interest rates and an overall market unease started to create headwinds by the end of the year,” said ThomasMonahan, a vice chairman at CBRE. “One indicator of this is the market’s overall absorption. While the market recorded its 24th consecutive quarter of occupancy growth as 2.48 million sq. ft. was absorbed in Q4, it was a figure 7.6% below the five-year quarterly average of 2.69 million sq. ft. Despite the quarter’s improved net absorption, 2022’s total was only 6.1 million sq. ft., the lowest annual total since 2017.”
Northern New Jersey posted 1.78 million sq. ft. in total leasing during Q4 2022, up 45% from the previous quarter. The Meadowlands submarket led the way with two leases totaling more than 100,000 sq. ft., the largest of which was Goffa USA’s 109,000 sq. ft. commitment at 50 Broad Street in Secaucus.
Leasing activity in Central New Jersey was also up during Q4, jumping 5.9% from Q3. The Exit 8A submarket recorded the largest leasing total of 1.4 million sq. ft., with The Home Depot inking a 1.28 million sq. ft. lease at 904 Cranbury South River Road. The Route 287/Exit 10 submarket had the second highest leasing total for Q4 at 858,000 sq. ft. due to a flurry of sizable leases including JD.com’s 318,000 sq. ft. pre-lease at 245 Mountain Ave in Middlesex, GMI Trading’s 124,000 sq. ft. commitmentat 125 Helen Street in South Plainfield, and CEVA Logistics’ 95,000 sq. ft. lease at 266 Old New Brunswick Road.
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CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2021 revenue). The company has more than 105,000 employees (excluding Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.