NEW JERSEY’S INDUSTRIAL VACANCY DECLINES AS U.S. VACANCY FALLS TO TWO-YEAR LOW

N.J. – August 3, 2011 – (RealEstateRama) — Cushman & Wakefield released midyear 2011 statistics for the U.S. industrial market that show the overall vacancy rate for New Jersey has declined. At the same time, the overall vacancy rate for the U.S. has declined to a two-year low.

New Jersey’s overall average vacancy rate declined to 10.0 percent at midyear 2011, down from 11.1 percent at this time last year, and down from 10.5 percent at the end of the first quarter of 2011.

Meanwhile, the overall vacancy rate for the U.S. declined to 9.7 percent at midyear 2011, down from 10.6 percent at this time last year, and its lowest level since the first quarter of 2009. With a 0.5 percentage point decrease from 10.2 percent at the end of the first quarter, it was the biggest quarterly decline in the U.S. industrial vacancy rate since the first quarter of 1997, when the vacancy rate dropped 0.6 percentage points to 7.8 percent. The U.S. markets with the highest quarter-over-quarter declines included the San Francisco Peninsula (declined from 8.5 percent to 7.1 percent), Boston (declined from 19.6 percent to 18.7 percent), Northern New Jersey (declined from 10.0 percent to 9.2 percent) and Silicon Valley, Calif. (declined from 12.7 percent to 11.9 percent).

Gualberto “Gil” Medina, executive managing director of Cushman & Wakefield of New Jersey, Inc., said, “The vacancy rate in New Jersey has continued to decline and is generally in line with the national rate. Northern New Jersey in particular has seen a dramatic decline in the vacancy rate, although we are now seeing some of the vacant space in the New Jersey Turnpike Exit 7A and 8A submarkets in the central portion of the state filling up as the result of some very aggressive pricing. Overall, year-to-date leasing activity has seen a very dramatic upswing through midyear.”

Year-to-date leasing activity for New Jersey totaled 11,120,377 square feet at midyear 2011, a 74 percent increase from 6,390,771 square feet at this time last year. Leasing activity for all U.S. industrial markets totaled 144.8 million square feet at midyear 2011, a 14 percent increase from the 126.6 million square feet leased in the first half of 2010. While 17 of the 33 markets tracked by Cushman & Wakefield have had increases in leasing activity year-over-year, markets with the largest increases included Inland Empire, Calif. (up 4.5 million square feet), Dallas/Fort Worth (up 3.5 million square feet), Central New Jersey (up 3.0 million square feet), Silicon Valley, Calif. (up 2.2 million square feet) and Chicago (up 1.4 million square feet).

“While things have been looking up for the U.S. industrial market over the past several quarters, it is now clear that our recovery is picking up momentum,” said Jim Dieter, executive vice president and head of U.S. Industrial Brokerage. “Though there are some new projects that have been delivered, the majority has been on a build-to-suit basis, and strong leasing activity has demonstrated that the demand is there.”

Year-to-date, 8.9 million square feet of new industrial space was added to the U.S. market, up slightly from the 8.2 million square feet added in the first half of 2010. However, compared to 2010 when 30.1 percent (or 2.5 million square feet) of that space was built on spec, only 11.2 percent (or 1.1 million square feet) of the new space added in 2011 has been speculative. Approximately 15.8 million square feet is currently under construction, with 13.4 million square feet expected to be completed in the second half of this year. Markets with the most new industrial space added year-to-date included Dallas/Fort Worth (1.6 million square feet), Chicago (1.4 million square feet), Atlanta (1.1 million square feet) and Houston (845,836 square feet).

Overall absorption measured positive 2,579,167 square feet in New Jersey, up from 5,871,266 at this time last year. For the third consecutive quarter, overall absorption for the U.S. was positive, totaling positive 38.1 million square feet year-to-date, up from the negative 12.9 million square feet in absorption recorded at this time last year. In the second quarter of 2011 alone, 30.3 million square feet of industrial space was absorbed.

***

Lowest National Industrial Vacancy Rates

      
CITY

2Q ‘11

QUARTERLY
CHANGE*

1.      
Greater
Los Angeles

4.8%

-0.1

2.      
Orange
County, Calif.

6.1%

-0.4

3.      
Lakeland,
Fla.

6.7%

+0.1

4.      
Portland,
Ore.

6.8%

-0.3

5.      
Miami

6.9%

-0.6

6.      
SF
Peninsula, Calif.

7.1%

-1.4

7.      
Philadelphia

7.3%

-0.4

8.      
St.
Petersburg/ Clearwater, Fla.

7.4%

 

-0.7

9.      
Denver

8.1%

+0.3

10.   Tampa,
Fla.

8.8%

-0.2

11.   Palm
Beach, Fla.

8.8%

-0.3

12.   Inland
Empire, Calif.

9.0%

-1.2

13.   Oakland,
Calif.

9.1%

-0.5

14.   Northern
New Jersey

9.2%

-0.8

15.   Houston

9.3%

-0.5

16.   Ft.
Lauderdale, Fla.

9.6%

+0.3

      NATIONAL
AVERAGE

9.7%

-0.5

17.   Chicago

10.5%

-0.5

18.   San
Diego

10.6%

0.0

19.   Baltimore

10.7%

-0.3

20.   Central
New Jersey

10.8%

-0.2

21.   Pennsylvania
I-81/I-78 Distribution Corridor

11.1%

 

-0.6

22.   Jacksonville,
Fla.

11.1%

-0.5

23.   Atlanta

11.3%

-0.4

24.   Silicon
Valley, Calif.

11.9%

-0.8

25.   Minneapolis

12.7%

+0.2

26.   Long
Island, N.Y.

12.9%

0.0

27.   Contra
Costa, Calif.

12.9%

-0.1

28.   Dallas/Ft.
Worth

12.9%

-0.5

29.   Hartford,
Conn.

13.5%

-0.5

30.   Suburban
Md.

13.8%

+0.2

31.   Orlando,
Fla.

14.0%

-0.5

32.   Phoenix

14.2%

-0.4

33.   Northern
Va.

15.0%

-0.3

34.   Boston

18.7%

-0.9

* Indicates change in “percentage points” from prior quarter (not percent).

***

Cushman & 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.

Media Contact:
Evelyn Weiss Francisco: evelyn (at) caryl (dot) com, (201) 796-7788

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