- Typical real estate cycles average seven years, and we are currently venturing into our tenth year of the expansion period. Very few people could have predicated such a duration. Nevertheless, given the access points to the ports, major highways and metropolitan demographics, New Jersey has become a logistic hub for online distribution (ecommerce), last-mile delivery centers and numerous ancillary industrial facilities pertaining to household goods. All of which have prolonged the cycle.
- Demand continued to outpace supply, creating a lack of quality space. This has led to developers pushing construction levels to all-time highs, with close to 12.6MSF under construction and 2.325MSF delivered space in Q3. A good majority of the SF under construction has already been preleased.
- Average asking rents maintained their upward trend. The last five years has seen an increase of over 40 percent. Exit 8A rental rates increased from $4 to $5.90 PSF NNN on average.
- Behind the scenes, margins are thinning, shopping patterns continue to trend to online purchases however consumer habits still include dining, drinking, hair salons and medical uses. The vacancy rate remains @ 6.1%.
- Leasing velocity is up slightly and vacancy levels edged downward due to healthy state fundamentals, improved unemployment figures, user purchases and alternative uses for office facilities such as hotel or industrial services. Transit-oriented areas and certain clusters in NJ such as the Short Hills-Summit and Waterfront office markets continue to see growth. Tenants looking for upgraded amenities & beneficial working environments.
- In August, US consumer confidence hit a five-month high with sustained spending reflected in the rise of house prices and upbeat labor market
- US unemployment decreased to 4.2% however NJ unemployment rose from 4.2% to 4.7% according to Bureau of Labor Statistics.