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A wave of new warehouse deliveries in New Jersey continued in the second quarter, putting upward pressure on vacancy rates despite millions of square feet of leasing activity.

New research reports say developers year to date have completed some 7.5 million square feet of industrial space in northern and central New Jersey. That includes a combined 4.37 million square feet that has come online in the Port, New Jersey Turnpike Exits 10/12 and Meadowlands submarkets, according to the real estate services firm NAI James E. Hanson, as vacancy hovered around 5 percent thanks to the surge of new inventory.

All told, the region saw a nearly 2 million-square-foot decrease in occupied space in the first half of 2024.

“Rising vacancy rates amid new construction deliveries and tempered demand were the key trends in the New Jersey industrial market in the first half of the year, while average asking rents moderated after several years of unprecedented growth,” NAI Hanson wrote in the report. Still, the firm noted that general market conditions “are expected to remain favorable for the remainder of year,” citing an 11 percent annual jump in cargo volume at the Port of New York and New Jersey and the region’s continued appeal for warehouse tenants.

“Despite the increase in vacancy, New Jersey is one of the tightest industrial markets in the country — with vacancy below the national average of 6 percent.”

A separate report by Cushman & Wakefield also pointed to the infusion of new supply and rising vacancy, while still citing persistent demand in New Jersey. The market recorded 5.8 million square feet of new leasing activity during Q2, the firm found, bringing the midyear total to 11.6 million square feet for an 11.2 percent uptick from the same point in 2023.

One tailwind came from Asia-based third-party logistics firms that have significantly increased their market share this year, C&W said. The report also noted that, despite the occupancy losses in the overall sector, the Class A segment responded with 1.4 million square feet of positive net absorption in Q2.

“The industrial market continues to show resilience with strong leasing activity and significant construction completions,” said John Obeid, a senior research manager with Cushman’s East Rutherford-based team. “While the influx of new space has increased the market’s vacancy rate, the Class A segment remains robust with positive net absorption, indicating sustained demand for high-quality logistics properties.”

The firm’s research found roughly 7.7 million square feet of new deliveries year to date in 2024, contributing to what it says is a 7.6 percent vacancy rate in the geography that it tracks. The region is on pace for the second-highest year on record in terms of completed construction, C&W said, while noting that a slowdown in new starts will provide an opportunity for the market to absorb the excess supply and improve occupancy rates.

NAI Hanson, meantime, said average asking rents remain the highest in the four largest submarkets — Ports, Exit 10/12, Meadowlands and Exit 8A — where rates are between $15.25 and $16.60 per square foot. Among those regions, Exit 10/12 has seen the highest leasing volume year to date with 1.8 million square feet recorded.

** article courtesy of Joshua Burd at