Industrial Highlights New Jersey | Q2 2014 Momentum continues in New Jersey The second quarter of 2014 has maintained a steady and similar pace to the first quarter of 2014. Central New Jersey has continued to outpace the rest of the market as demand for Class A and Class B space has remained strong. As a result, rental rates have continued to climb higher since the beginning of the year, with Class A rental rates increasing more than 5.3 percent quarter over quarter. Capital markets activity rebounded slightly in the second quarter, but remained constrained compared to a year ago. However, pricing has continued to trend ever higher. With rental rates on the rise, and unwaveringly low interest rates, both sales volume and prices should continue to climb during the second half of the year. In response to tight availability, higher rental rates and continued demand for Class A product, new construction projects have steadily increased. The focal point of these projects being centered around the Turnpike Corridor and the Port of New York/New Jersey where 16.3 million square feet and 7.3 million square feet are either approved or currently under construction, and can be be delivered over the next two years. Of the completed projects this quarter, the most notable was KTR Capital Partners completion of a 1.4 million-square-foot built-to-suit facility for Amazon.com located at 50 Canton Way in Robbinsville. Leasing activity Meadowlands • Ferguson Supply recently leased nearly 450,000 square feet from Hartz Mountain Industries at 100 Meadowlands Parkway. • Icon Eyewear leased 135,000 square feet from the Sitex Group at 5 Empire Boulevard in South Hackensack. Exit 8A • Sudler Companies’ 443,042-square-foot facility at 200 Liberty Way in Cranbury was fully leased to Port Jersey Logistics. • Seldat leased 228,356 square feet at 15 Thatcher Road in South Brunswick from Forsgate Industrial Partners. Seldat will occupy the entire facility. Vacancy Rents Net absorption Leasing volume Sales prices Sales volumes Construction deliveries Arrows represent change from prior quarter • OHL’s lease of over 611,000 square feet at 1 Costco Way in Monroe with Principal Financial Group represented the largest lease signed in the Northern and Central New Jersey industrial market this past quarter. • Piramal Glass, a packaging solution company, leased more than 209,000 square feet of distribution space from Liberty Property Trust at 329 Herrod Boulevard in South Brunswick. Fairfield • AWR renewed its lease at 7 Just Road in Fairfield with Mandelbaum & Mandelbaum. AWR occupies the entire building. • R.R. Donnelly renewed its lease at 5 Henderson Drive in West Caldwell. The print services company occupies the entire 210,530square-foot facility that is owned by The Hampshire Companies. Port • New Breed Logistics has expanded its lease at 620 Division Street in Elizabeth to 125,000 square feet. The 155,875-square-foot facility is owned by Terreno Realty. • Urban Express leased 119,521 square feet at 201 Bay Ave in Elizabeth. Hartz Mountain Industries owns the 509,093-squarefoot facility. Sales activity • L&B Realty Advisors, LLP added to its portfolio when it purchased 10 properties in Northern and Central New Jersey from Sitex Group. The transaction, which was calculated on a 5.10 percent cap rate, was finalized for $91.3 million and totaled 861,485 square feet. • Matrix Development Group purchased a 324,337-square-foot warehouse at 1 Heller Park Lane in Somerset from Heller Industrial Parks for $13.5 million ($42 per square foot). • North American Terminals purchased a 115,078-square-foot facility along with a 78,600-square-foot truck terminal in Elizabeth. The properties were sold by Bilkays Express for $20.6 million ($106 per square foot). • LM Foods purchased 100 Raskulinecz Road, a 71,480-square-foot building in Carteret, for $4.5 million ($63 per square foot). • Prestige Motors purchased 50 Williams Drive in Ramsey. The 75,000square-foot warehouse was sold by BRD Associates for $6.2 million ($83 per square foot). • A 14-acre land site at 750 Clark Drive in Mount Olive sold for $2.4 million to Fratelli Beretta. The meat processing company has begun construction on a 180,000-square-foot facility. • Mill Creek Residential Trust, LLC purchased 350 Warren Street in Jersey City for $38.0 million. The purchaser plans to redevelop the 500,000-square-foot facility into a 366-unit apartment building. • AEW, in partnership with Dermody Properties has acquired the 18.3 acre former Air Products site at 11 Corn Road in South Brunswick with plans to speculatively construct 315,000 square feet starting later this year. Construction activity • Duke Realty Corporation has begun construction on two of three planned facilities of 495,000 and 134,000 square feet at 1016 West Edgar Road in Linden. The speculative construction project is located at the former General Motors site with the buildings to be delivered in Q1 2015. • Matrix Development has three development projects underway in the Exits 7A and 8A submarkets; a 240,000-square-foot warehouse at Montgomery Way in Robbinsville which will be occupied by Falken Tire and delivered in Q3 2014, a speculative 183,000-square-foot building adjacent to the Falken building delivering in the same time frame and a 550,000-square-foot speculative building at 965 Cranbury South River Road in South Brunswick to be delivered in Q4 2014. For more information, please contact: Steve Jenco Research Director 1 Meadowlands Plaza, Suite 804 East Rutherford, NJ 07073 +1 973 404 1489 [email protected] • Clarion Partners & Trammell Crow are developing two warehouses at the South Washington Business Park in Piscataway. These facilities are being built on a speculative basis and total 532,793 square feet. To date, the smaller of the two warehouses, at 227,042 square feet, has been partially leased to Dawn Foods. Once completed, Dawn Foods will occupy 130,861 square feet of the new facility. Both projects are scheduled to be delivered during Q3 2014. • Prologis is halfway through construction of its four planned facilities project at Port Reading Business Park in Woodbridge. To date, two warehouses: 1005 W Middlesex Avenue (737,620 square feet) and 1009 W Middlesex Avenue have (166,952 square feet) have been completed. The remaining two: 1115 W Middlesex Avenue (582,965 square feet) and 1119 W Middlesex Avenue (280,384 square feet) are scheduled to be completed in Q4 2014 and Q1 2015, respectively. NFI Industries has preleased 70.0 percent (405,206 square feet) at 1115 W Middlesex Avenue for ten years. • The largest project under construction is a Prologis development at 219-295 Route 1 & 9 in Jersey City. The 878,264-square-foot endeavor is fully leased to Imperial Bag & Paper Company and PeaPod (A Royal Ahold company). The project is slated for delivery by Q3 2014. • Goya continued construction on its 615,000-square-foot warehouse/ distribution and headquarters facility. Located at 360 County Road in Jersey City, the high-profile $127.0 million project qualified for $81.9 million of UTHTC incentives. • KTR Capital Partners completed its flagship, build-to-suit project for Amazon.com in Q2 2014. The state-of-the-art, 1.4 million-square-foot facility is located at 50 Canton Way, Robbinsville in the Matrix Business Park at 7A. • KTR Capital Partners is also renovating 275 Omar Avenue in Avenel, a 280,000-square-foot facility formerly owned by C&S Wholesale Grocers. This asset has been pre-leased to Amazon Fresh. • The IDI/JPMorgan Chase-owned, 450,000-square-foot facility at 301 Middlesex Center Boulevard in South Brunswick will be completed during Q3 2014. The speculative project is currently available for lease. ©2014 Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle. The information contained in this document has been compiled from sources believed to be reliable. Jones Lang LaSalle or any of their affiliates accept no liability or responsibility for the accuracy or completeness of the information contained herein and no reliance should be placed on the information contained in this document.
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