News/Blog
Good News Friday: Jersey Surge
The U.S. industrial market surprised on the upside in the second quarter as net absorption of nearly 20 million square feet pushed the vacancy rate down by 30 basis points to 10.6 percent. The surge was led by an unlikely contender, the previously quiet Northern and Central New Jersey market where absorption of nearly 7.5 million square feet wiped out half the loss in occupied space registered since the recession began. Steve Jenco, client services manager for the Edison and Fairfield offices of Grubb & Ellis, says that leasing activity picked up across the spectrum of submarkets and product types, from logistics markets like Exits 8A, 10 and 12 to the Meadowlands where the inventory is heavy on lower-clearance, standard industrial buildings. A variety of users took advantage of market conditions to sign aggressive renewals or relocate. Even R&D/flex space was in demand, not by big-name pharmaceutical and tech companies but by some start-up and younger companies.
The industrial market is finally responding to strength in the manufacturing and transportation sectors that has been evident since late last year. GDP growth slowed in the second quarter to an annualized rate of 2.4 percent, down from 3.7 percent in the first quarter. But the second-quarter turnaround in the industrial market suggests that it has built up enough momentum to carry it through a patch of slower economic growth.
-Bob Bach, Grubb & Ellis Senior Vice President, Chief Economist
