- Central New Jersey remained strongly driven by powerhouse markets like Exit 8A.
- Major submarkets in Northern New Jersey had robust leasing activity and net absorption. Small building construction (under 100,000 square feet) was active.
JLL’s industrial property clock illustrates where each market sits within its real estate cycle. Markets generally move clockwise around the dial, with those markets on the left side generally facing more landlord-favorable environments, whereas those on the right experience generally tenant-favorable conditions.
United States market conditions still healthy, construction still not overheated:
- Vacancy was at a 15-year low (6.4%) and is expected to trend closer to 6.0% in 2016.
- Net absorption has been positive for 23-straight quarters.
- Annual net absorption was 30% higher than construction completions in 2015: 231.2 m.s.f. vs. 177.3 m.s.f. (115.0 m.s.f was speculative). Absorption is expected to remain 7.0% higher in 2016 despite an expected increase in new construction.
- Tenant demand (an indicator of future absorption) exceeds ground-broken speculative construction by more than 2:1, on a square footage basis: 286.7 m.s.f. vs. 115.0 ms.f.
- Warehouse asking rents were up 5.4% from 2014, some markets – where vacancies are well-below the national average – are anticipated to post double-digit gains in 2016.
Download JLL’s Q4 2015 United States Industrial Outlook Report to learn the variables that may affect the industrial segment in 2016.