NJ Industrial Market remains stable in 2nd quarter
By Mel Fabrikant Thursday, August 16, 2007, 11:43 AM EDT
CB Richard Ellis Releases 2nd Quarter Industrial Market Overview
The northern/central New Jersey industrial markets remained stable in the second quarter, according to the research of CB Richard Ellis¹ 2nd Quarter 2007 Industrial MarketView report. In the second quarter in New Jersey, the industrial market finished with leasing velocity at 4.02 million square feet, which is equivalent to the second quarter 2006, but a 2.43 million-square-foot decrease from the first quarter.
³Newer, high-quality warehouse space was the most desired product in both the northern and central New Jersey markets during the second quarter,² stated Thomas Tucci, senior managing director of CB Richard Ellis.
³Locations near main transportation hubs, coupled with international demand for high-quality warehouse space, will continue to make our region an attractive industrial market.²
According to CB Richard Ellis, second quarter results in the northern/central New Jersey industrial real estate market were characterized by an increase in industrial sales and stable average net lease rates.
Consumer products, food and beverage, and cosmetics companies were the major drivers of demand for the duration of the quarter.
While experiencing a drop in sales prices and steady lease rates, positive net absorption is anticipated in the northern/central industrial market in the upcoming months. The industrial trends of renovating old industrial space due to growing demand for newer product, as well as replacing these facilities with mixed-use developments where land constraints exist will continue in the remainder of the year.
Additional highlights from the CB Richard Ellis industrial market report
include:
* The market availability rate increased slightly to 6.7 percent in the second quarter, a 0.2 percent increase from the first quarter, but 0.6 percent lower than the second quarter 2006.
* Net absorption dropped 4.57 million square feet to negative 2.32 million square feet from last quarter, yet remained 1.68 million square feet higher from a year ago. The new industrial space on the market, in addition to the growing importance of the ports and the completion of major industrial product underway, is expected to increase the positive net absorption during the second half of 2007.
* Average asking net lease rates in the second quarter remained consistent, averaging $6.02-per-square-foot, only a $0.02 decline from the first quarter¹s rate of $6.04-per-square-foot, and a $0.20 increase from last year¹s rate of $5.82-per-square-foot. The majority of the northern/central New Jersey submarkets that experienced significant increases in leasing rates were mostly passive or unchanged in the past few quarters, but showed positive demand during the second quarter. The submarkets commanding the highest rate increases were the Route 280 Corridor (up $1.25 per sq. ft.); Northeast Bergen (up $0.88 sq. ft.); Hunterdon (up $1.09 per sq. ft.); and Somerset (up $0.81 per sq. ft.). The Central Bergen, Meadowlands, and Brunswicks/Exit 9 submarkets experienced some declines, while the Monmouth,
I-78 East, and Suburban Essex submarkets remained unchanged.
About CB Richard Ellis
CB Richard Ellis Group, Inc. (NYSE:CBG), an S&P 500 company headquartered in Los Angeles, is the world¹s largest commercial real estate services firm (in terms of 2006 revenue). With over 24,000 employees, the Company serves real estate owners, investors and occupiers through more than 300 offices worldwide (excluding affiliate and partner offices). CB Richard Ellis offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. In 2007, BusinessWeek named CB Richard Ellis one of
the 50 ³best in class² companies across all industries. Please visit our
Web site at www.cbre.com <http://www.cbre.com> .
The northern/central New Jersey industrial markets remained stable in the second quarter, according to the research of CB Richard Ellis¹ 2nd Quarter 2007 Industrial MarketView report. In the second quarter in New Jersey, the industrial market finished with leasing velocity at 4.02 million square feet, which is equivalent to the second quarter 2006, but a 2.43 million-square-foot decrease from the first quarter.
³Newer, high-quality warehouse space was the most desired product in both the northern and central New Jersey markets during the second quarter,² stated Thomas Tucci, senior managing director of CB Richard Ellis.
³Locations near main transportation hubs, coupled with international demand for high-quality warehouse space, will continue to make our region an attractive industrial market.²
According to CB Richard Ellis, second quarter results in the northern/central New Jersey industrial real estate market were characterized by an increase in industrial sales and stable average net lease rates.
Consumer products, food and beverage, and cosmetics companies were the major drivers of demand for the duration of the quarter.
While experiencing a drop in sales prices and steady lease rates, positive net absorption is anticipated in the northern/central industrial market in the upcoming months. The industrial trends of renovating old industrial space due to growing demand for newer product, as well as replacing these facilities with mixed-use developments where land constraints exist will continue in the remainder of the year.
Additional highlights from the CB Richard Ellis industrial market report
include:
* The market availability rate increased slightly to 6.7 percent in the second quarter, a 0.2 percent increase from the first quarter, but 0.6 percent lower than the second quarter 2006.
* Net absorption dropped 4.57 million square feet to negative 2.32 million square feet from last quarter, yet remained 1.68 million square feet higher from a year ago. The new industrial space on the market, in addition to the growing importance of the ports and the completion of major industrial product underway, is expected to increase the positive net absorption during the second half of 2007.
* Average asking net lease rates in the second quarter remained consistent, averaging $6.02-per-square-foot, only a $0.02 decline from the first quarter¹s rate of $6.04-per-square-foot, and a $0.20 increase from last year¹s rate of $5.82-per-square-foot. The majority of the northern/central New Jersey submarkets that experienced significant increases in leasing rates were mostly passive or unchanged in the past few quarters, but showed positive demand during the second quarter. The submarkets commanding the highest rate increases were the Route 280 Corridor (up $1.25 per sq. ft.); Northeast Bergen (up $0.88 sq. ft.); Hunterdon (up $1.09 per sq. ft.); and Somerset (up $0.81 per sq. ft.). The Central Bergen, Meadowlands, and Brunswicks/Exit 9 submarkets experienced some declines, while the Monmouth,
I-78 East, and Suburban Essex submarkets remained unchanged.
About CB Richard Ellis
CB Richard Ellis Group, Inc. (NYSE:CBG), an S&P 500 company headquartered in Los Angeles, is the world¹s largest commercial real estate services firm (in terms of 2006 revenue). With over 24,000 employees, the Company serves real estate owners, investors and occupiers through more than 300 offices worldwide (excluding affiliate and partner offices). CB Richard Ellis offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. In 2007, BusinessWeek named CB Richard Ellis one of
the 50 ³best in class² companies across all industries. Please visit our
Web site at www.cbre.com <http://www.cbre.com> .
