Garden State’s activity up 62.6 percent; U.S. activity up 12.5 percent
EAST RUTHERFORD, N.J. – May 27, 2011 – (RealEstateRama) — Cushman & Wakefield’s first quarter statistics for the U.S. industrial market show leasing activity in New Jersey increased in the first three months of 2011, as the U.S. market continued towards recovery.
Leasing activity in the U.S. totaled 68.0 million square feet in the first three months of 2011, up 12.5 percent from the 60.4 million square feet leased at this time last year, and the strongest first quarter since 2007, when 79.3 million square feet was leased. The U.S. industrial markets with the largest percentage increases in leasing activity included Long Island, NY (up 172 percent), Suburban Maryland (up 118.8 percent) and Silicon Valley, Calif. (up 65.1 percent). Industrial leasing activity in Northern and Central New Jersey totaled 4.7 million square feet at the end of the first quarter of 2011, up from 2.6 million square feet at this time last year.
“Industrial leasing activity in the Garden State has steadily increased over the past several months and is expected to continue on a positive trajectory,” noted Gualberto “Gil” Medina, Cushman & Wakefield’s executive managing director in New Jersey. “An uptick in renewal activity is expected, as tenants continue looking to restructure leases in order to take advantage of the market. Specific industries – primarily retail, shipping and logistics – will continue to keep leasing activity alive in areas such as Exit 8A and the Port Region, which have proven to be the nucleus of industrial activity here.”
The overall vacancy rate for the U.S. industrial market declined to 10.2 percent at the end of the first quarter of 2011, a 0.1 percentage point decrease from 10.3 percent at year-end 2010, and down from 10.8 percent at this time last year. Vacancy declined in 22 of the 34 U.S. industrial markets tracked by Cushman & Wakefield quarter-over-quarter, with the Inland Empire, Calif. (declined to 10.2 percent from 11.0 percent), Jacksonville, Fla. (declined to 11.6 percent from 12.2 percent) and Hartford, Conn. (declined to 14.0 percent from 14.7 percent) charting the largest declines. In Northern and Central New Jersey, the first quarter vacancy rate was 10.5 percent, a 0.7 percentage point decrease from 11.2 percent at the end of 2010.
New construction remained limited, with 3.2 million square feet of new product added to the market so far this year, on par with the 3.2 million square feet delivered in the first quarter of 2010, and the lowest amount of construction completions since Cushman & Wakefield started tracking the U.S. industrial market. Just 176,200 square feet of new industrial space was added to the market in Northern and Central New Jersey.
Overall absorption – which can be positive or negative in relation to whether more space is being occupied (positive absorption) or added to the market vacant (negative absorption) – was positive 7.7 million square feet at the end of the first quarter, up from negative 15.8 million square feet at this time last year. Overall absorption has returned to a positive status in Northern and Central New Jersey as well, registering 1.7 million square feet at the end of the first quarter, up from negative 4.6 million square feet one year ago.
“Leasing activity has returned to levels we haven’t seen since pre-recession,” said Jim Dieter, executive vice president and head of U.S. Industrial Brokerage. “With this strong rebound in demand, coupled with declining supply, the U.S. industrial market is steadily making its way towards recovery.”
About Cushman & Wakefield National IndustrialCushman & Wakefield is the world’s largest privately-held commercial real estate services firm. Founded in 1917, it has 234 offices in 61 countries and more than 13,000 employees. The firm represents a diverse customer base ranging from small businesses to Fortune 500 companies. It offers a complete range of services within five primary disciplines: Transaction Services, including tenant and landlord representation in office, industrial and retail real estate; Capital Markets, including property sales, investment management, investment banking, debt and equity financing; Corporate Occupier & Investor Services, including integrated real estate strategies for large corporations and property owners; Consulting Services, including business and real estate consulting; and Valuation & Advisory, including appraisals, highest and best use analysis, dispute resolution and litigation support, along with specialized expertise in various industry sectors. A recognized leader in global real estate research, the firm publishes a broad array of proprietary reports available on its online Knowledge Center at www.cushmanwakefield.com.
Evelyn Weiss Francisco:
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