New Jersey can’t keep up with demand for industrial space, according to Duke Realty leasing vice president Ben Rosen.
“There are no buildings available under 300,000 square feet in northern New Jersey—and the demand for industrial space is strong and consistent,” said Rosen “The trend driving the industrial market is the supply side and the industry can’t keep up — it takes too long to develop and there is not enough land.”
Rosen was speaking during the annual Developers Night hosted by the Industrial and Office Real Estate Brokers Association of the New York Metropolitan Area (IOREBA) at the Marriott Glenpointe Hotel in Teaneck, N.J. Hundreds of professionals gathered to network and listen to a panel of experts discuss trends in the commercial real estate marketplace in New Jersey.
Panelists agreed the industrial sector will remain strong for the foreseeable future with the continued strength of e-commerce and the move away from brick and mortar retail stores.
Jeff Milanaik, principal, Bridge Development Partners,noted that “the capital markets appetite for industrial is phenomenal — there is an uptick of activity in the ports and the inherent need for warehouse space.”
Regarding the office market, John Saraceno, Jr., Managing Principal, Onyx Equities, noted that there is a carnage of commercial office space, “and location, location, location is more important now more than ever. We are seeing the same process over and over of people tired of occupying 30 to 40-year-old office buildings.”
There is not a lot of quality office space on the market and there are a lot of people fighting for the same space. He also noted that the parking density trend is not going away, as we see more tenants wanting more parking.
Kevin Welsh, Executive Managing Director, Newmark Knight Frank, noted that the “world is flush with cash” and he has never seen this amount of liquidity in the market. Being in the ninth year of this low interest rate cycle, the belief is that we are in a good place with strong consumer confidence. “What could slow us down is a rise in interest rates, but liquidity will keep a lid on this in the short term, with capital spending driving the real estate market,” he added.
All in all, panelists remain optimistic about the state of New Jersey’s commercial real estate market over the next couple years with some of the driving factors including the repurposing of retail centers for industrial use; increased activity at the ports; redeveloping and upgrading office buildings to include amenity packages geared towards millennials and new technology; and federal tax reform.