JLL released the U.S. Industrial Outlook for Q1 2017, and the market started the year on a positive note.
Highlights for New Jersey Industrial:
- The “new normal” for industrial rental rates has left many tenants with a feeling of sticker shock.
- Vacancy rates in primary sub-markets reached new historic lows, and in some cases stand below 2.0 percent.
- Despite the recent surge in rental rates for Northern and Central New Jersey, leasing velocity for new space remained strong.
New Jersey Industrial Outlook:
The growing need for retailers to locate industrial facilities near major population centers has driven Northern and Central New Jersey’s industrial market to historic levels. With many retailers and parcel service companies still building out their last mile networks, we expect demand for industrial space near the NY metro area to remain robust. This demand will further extend the length of the present industrial market expansion, and as a result, the current imbalance between supply and demand is expected to hold constant over the short to mid term.
U.S. Outlook-Three things to keep an eye on in the coming months:
- U.S. Industrial rents continue to rise: The resounding strength of industrial tenant demand couples with the tightest fundamentals yet experienced in the sector continued to drive the sixth consecutive year of rent growth.
- Logistics and distribution and 3PL dominate leasing: Responding to healthy consumer spending and growing e-commerce sales, the combined logistics and distribution and 3PL sectors committed to 24% of total leasing activity.
- 2017 expected to be another year for construction: The construction pipeline continues to grow, led by a 29% increase of construction activity of build-to-suit properties (up from the fourth quarter).
Download the full report.