In NJ, industrial space will lead recovery.
"The oversupply in the office market is the result of tremendous overbuilding and a weak economy. Essentially the softness in the industrial market, which has not been terribly overbuilt, centers on lackluster demand based on the soft economy, "Singer explained.
However, a new Edward S. Gordon/New Jersey industrial market report which tracks 12 00 industrial buildings totalling more than 275 million square feet reveals that there is an increase in demand for modern Class A and B warehouse buildings more than 100,000 square feet in size.
"In fact, certain submarkets including the Meadowlands area, Edison and the New Jersey Turnpike Exit 8A area are experiencing a positive absorption," Singer said.
"Each of these locations has specific appeal to users," Singer said.
The Meadowlands submarket is driven by medium and smaller companies either privately owned or divisions of larger corporations, who service the New York City and northern New Edison, at Exit 10 of the New Jersey Turnpike, is experiencing an increase in service distribution users whose market extends to central and western areas of New Jersey. The users at Exit 8A are the larger corporate distribution users who either directly or through third party contractors service the northeast region.
Interestingly, another trend is boosting activity in the industrial sector. Offprice retailers are finding existing, well located warehouses ideal for their operations. Value retailers like Price Club, Sam's and Costco are recycling 100,000 to 200,000-square-foot industrial buildings which would traditionally sell for much less over a longer time frame to an industrial user.
Pricing is a major factor spurring leasing and sales. "Owners are aggressively marketing their industrial facilities from a pricing standpoint," Singer said.
The result is that users with an operational need are taking advantage of the excellent values currently available.
For example, the 360,000-square-foot former GM Delco property at 1735 Jersey Avenue, Just off Route 1 in North Brunswick is currently priced 30 percent below what it would have leased for five years ago.
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|Title Annotation:||Edward S. Gordon Company of New Jersey predicts stronger recovery for industrial space rentals in New Jersey|
|Publication:||Real Estate Weekly|
|Date:||Jan 6, 1993|
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