year end 2017 · 20 duke rd., piscataway 203,674 $17,315,964 msn pharmaceuticals penwood real...

NAI Hanson sold 7777 West Side Avenue in North Bergen - 126,000 sf in 2Q2017

Northern & Central New Jersey Industrial ReportYear End 2017

Year End Edition

Sussex

Franklin

Newton

Hackettstown

Freehold

Robbinsville

Flemington

Long Valley

Newark

West Milford

Ridgewood

WestOrange

Parsippany

Somerville

Bedminister

Edison

Rahway

Hamilton

Princeton

Lebanon

Hardwick

Hackensack

Wayne

Kinnelon

Union

LindenScotchPlains

Trenton

EastBrunswick

Hopatcong

JerseyCity

RutherfordSecaucus

Mahwah

Paramus

Tena�y

Cranbury

South Amboy

Jamesburg

Morristown

Englewood

Hamburg

Sparta Wanaque

Totowa

Clifton

Montvale

Norwood

Montville

BoontonDoverBuddLake

Randolph

Warren

Cokesbury

Avenel

Elizabeth Bayonne

Carteret

Submarkets

Warren & Sussex

Route 46/23/3 Corridor

Northern Bergen County

Central Bergen County

Meadowlands

Suburban Essex

Morris Region

Port

Hunterdon

Somerset

Exit 10/12

Brunswick/Exit 9

Exit 8A

Exit 7A

Submarket Map

County Overview

Northern & Central 4Q 2017Market Snapshot

Overview

Total RBA Total Vacant Available SF

Total Vacant Available %

Total Net Absorption

Total SF Leased

RBA Under Construction

Total Average Asking Rate

NJ Overall 661,423,087 24,488,390 3.7% 5,730,740 9,983,473 13,640,183 $7.32

Middlesex 189,254,526 4,672,257 2.5% 3,006,948 5,755,780 7,167,844 $7.45 Bergen 91,812,485 3,929,573 4.3% 422,546 844,545 749,866 $8.84 Hudson 82,204,997 3,527,471 4.3% 161,697 467,854 680,737 $8.11 Essex 65,579,500 2,254,064 3.4% 58,716 534,771 1,025,063 $7.97 Union 63,224,910 2,629,680 4.2% 157,334 976,439 594,051 $6.48 Passaic 53,559,697 2,057,563 3.8% 238,357 397,007 459,822 $7.89 Morris 39,302,158 2,996,373 7.6% 408,148 259,135 35,000 $6.80 Mercer 32,780,597 1,035,258 3.2% 986,063 494,936 1,202,000 $4.92 Somerset 28,173,709 609,226 2.2% (57,921) 130,410 700,000 $8.09 Hunterdon 6,502,287 186,407 2.9% (1,119) 28,152 0 $8.23 Warren 6,381,728 294,764 4.6% 325,302 15,000 1,000,200 $5.51 Sussex 2,646,493 295,754 11.2% 24,669 79,444 25,600 $5.53

Orange, NY 28,242,276 1,458,924 5.2% 89,937 200,445 114,000 $6.07 Rockland, NY 15,163,128 1,016,452 6.7% 23,979 77,900 52,000 $9.53

Submarket Overview

Source: CoStar 10,000 + sf - All information comes from sources deemed reliable by NAI James E. Hanson.

Total RBA Total Vacant Available SF

Total Vacant Available %

Total Net Absorption

Total SF Leased

RBA Under Construction

Total Average Asking Rate

Ports 138,570,748 5,460,038 3.9% 417,401 1,473,347 1,590,114 $7.12 Exit 10/12 103,721,771 3,427,061 3.3% 1,867,453 1,225,204 3,091,336 $8.04 Meadowlands 93,715,149 3,573,780 3.8% 488,282 532,231 1,129,408 $8.76 Exit 8A 63,663,309 995,504 1.6% 885,470 4,258,802 4,076,508 $6.56 Route 46/23/3 Corridor 53,151,892 2,036,907 3.8% 264,229 376,607 459,822 $7.91 Exit 7A 42,452,042 1,526,803 3.6% 945,663 518,026 1,215,750 $5.31 Morris Region 37,416,888 2,948,250 7.9% 388,011 257,535 35,000 $6.77 Somerset 27,983,347 594,226 2.1% (57,921) 130,410 700,000 $8.08 Central Bergen County 27,107,961 1,316,425 4.9% 19,894 395,885 0 $9.04 Suburban Essex 23,869,408 1,032,519 4.3% (73,458) 263,371 29,000 $6.92 Brunswick/Exit 9 21,869,446 249,692 1.1% 254,025 271,774 0 $6.22 Northern Bergen County 21,873,339 1,032,805 4.7% (62,061) 180,775 301,195 $8.77 Warren & Sussex 9,028,221 590,518 6.5% 349,971 94,444 1,025,800 $5.51 Hunterdon 6,426,087 186,407 2.9% (1,119) 28,152 0 $8.23

There was over $1.3 billion in sales volume this quarter. The average price per square foot is up $37.09 per square foot from the previous quarter ending at $118.75 per square foot for the year. Portfolio and multi-property sales helped to contribute to this increase.

The most noteworthy portfolio sale involved Duke Realty Corporation who purchased 4,280,000 square feet across New Jersey, California and Florida from Bridge Development Partners for approximately $700,000,000. The sale included 2,250,000 square feet in New Jersey alone of existing space and 855,000 square feet under construction. Properties in the sale included 960, 980 and 1000 High Street, Perth Amboy; 773 Davidson Mill Road, Monroe; 900 Federal Boulevard, Carteret; 5 Ethel Boulevard, Wood-Ridge; 429 Delancy Street, Newark; and 2563 Route 130, Cranbury. Tenants in these properties include Virginia Dare Extracts, Rema Foods, Target, Horizon Group and Creative Logistics Services LLC.

44 and 48 Station Road in Cranbury sold as a multi-property sale from a joint venture between Rockefeller Group Development Corporation and Alfieri to Clarion Partners. 48 Station Road, a 930,030 square foot distribution building, and 44 Station Road, a 310,937 square foot warehouse, were 100% leased to Wayfair. The properties sold for $135.78 per square foot or $168,500,000.

A top single transaction included the sale of 1 Truman Drive South in Edison. Liberty Property Trust purchased the 369,313 square foot building for

$48,850,000 or $132.27 per square foot from a joint venture between Cohen Asset Management and J.P. Morgan Asset Management. The property is 100% leased to Midwest Air Technologies, Inc.

Sales

“The market has seen annual rent growth in excess of 4% in some locations and cap rates have continued to decline, even though the Federal Reserve has signaled to raise interest rates in the future as they seek to get to an interest rate equilibrium for the economy.”

-Greg JamesDirector of Capital MarketsNAI James E. Hanson

1000 High Street, Perth Amboy

1 Truman Drive South, Edison

Sales Activity

Leasing

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

$4.00$4.50$5.00$5.50$6.00$6.50$7.00$7.50$8.00

NNN Rent Overall Vacant Available Percent % Total

The Northern and Central New Jersey market saw over 9,900,000 square feet leased in the fourth quarter of 2017 and over 34,000,000 square feet leased in total for 2017. In turn, net absorption ended the quarter with over 5,700,000 square feet absorbed. This is an increase of over 4,000,000 square feet from the previous quarter and over 11,800,000 square feet absorbed for the year. Average asking rates ended the year at $7.32 per square foot, which is a $0.13 per square foot decrease from the previous quarter. Rates are up $0.68 per square foot from the fourth quarter of 2016. Vacancy dropped 0.5% from the previous quarter and ended the year at 3.7%. Vacancy rates remain on the decline and this is the first time in years that we have seen the vacancy rate below 4%.

Average asking rates remain highest in the Bergen County submarkets. The Central Bergen County submarket saw an average asking rate of $9.04 per square foot followed by the Northern Bergen County market, which saw an average asking rate of $8.77 per square foot. The submarkets remain tightest in Brunswick/Exit 9 (1.1% vacancy rate) and Exit 8A (1.6% vacancy rate). The Exit 8A submarket also saw the most activity with over 4,200,000 square feet leased in the fourth quarter.

Wiliams-Sonoma was the top renewal for the quarter. They renewed their 1,351,237 square feet at 340 Middlesex Center Boulevard in Monroe Township and top lease transactions for the quarter included Best Buy; Allied Beverage Group; and Home Depot. All three top transactions signed whole building

leases for buildings currently under construction. Best Buy leased 725,400 square feet at 171 River Road in Piscataway. The property is currently under construction by the Rockefeller Group. Allied Beverage Group leased 540,000 square feet at 700 Kapkowski Road in Elizabeth and Home Depot leased 504,428 square feet at 58 Station Road in Cranbury. Both buildings are being developed by Prologis and all three buildings are slated to be complete in the second quarter of 2018.

Northern & Central NJAverage Asking Rate vs. Vacant Available Rate

Northern & Central NJLeasing Activity

ASKING RATE$0.13

*Compared to 3Q17

700 Kapkowski Road, Elizabeth

Leasing Activity

6,000,000

7,000,000

8,000,000

9,000,000

10,000,000

11,000,000

12,000,000

13,000,000

VACANCY RATE0.5%

LEASING ACTIVITY3,567,653 SF

NET ABSORPTION4,088,488 SF

Significant LeasesTenant Address Size (SF) Submarket

Williams- Sonoma (Renewal) 340 Middlesex Center Blvd., Monroe Twp. 1,351,237 Exit 8A

Best Buy 171 River Rd., Piscataway 725,400 Exit 10/12

Allied Beverage Group 700 Kapkowski Rd., Elizabeth 540,000 Ports

Home Depot 58 Station Rd., Cranbury 504,428 Exit 8A

LG Electronics USA 159 Milford Rd., East Windsor 410,300 Exit 7A

Global Transport Logistics 276 Old New Brunswick Rd., Piscataway 253,575 Exit 10/12

Fabuwood (Renewal) 100 Industrial Dr., Jersey City 126,672 Ports

Admiration Oil 330 S Van Brunt St., Englewood 103,000 Central Bergen County

Sanofi 4 Bell Dr., Ridgefield 84,237 Central Bergen County

Automann 635 Pierce St., Somerset 60,000 Somerset

Kalustyan Corp* (Renewal) 1835 Burnet Ave., Union 50,000 Ports

NGY Stone & Cabinetry 276 Old New Brunswick Rd., Piscataway 45,760 Exit 10/12

Next Gen IV* 181 E Halsey Rd., Parsippany 28,300 Morris Region

American Musical Supply* 70-82 McKee Dr., Mahwah 27,539 Northern Bergen County

Goffa International Corp* 235 Murray Hill Pkwy., East Rutherford 26,900 Meadowlands

Light Packing Corp 239 Lindbergh Pl., Paterson 26,000 Route 46/23/3 Corridor

Significant Sales Address Size (SF) Price Buyer Seller

Various sites in NJ 3,110,000 $517,000,000 Duke Realty Corp. Bridge Development Partners

44 & 48 Station Rd., Cranbury (multi-property sale)

310,937 & 930,030

$168,500,000 Clarion Partners Rockefeller Group JV Alfieri LLC

1 Truman Drive S., Edison 369,313 $48,850,000 Liberty Property Trust Cohen Asset Mgmt, Inc. JV J.P. Morgan Asset Mgmt

95 Demarest Dr., Wayne 163,253 $43,263,000 CenterPoint Properties Rockefeller Group

191 E. Hanover Ave., Morristown 561,418 $20,000,000 JMF Properties Group Colgate-Palmolive Company

20 Duke Rd., Piscataway 203,674 $17,315,964 MSN Pharmaceuticals Penwood Real Estate Investment Management

430 Industrial Ave., Teterboro 132,000 $16,150,000 LBA Realty Richard Catena Acura

10 Industrial Ave., Mahwah 91,388 $8,000,000 Northeastern Security Development Corp.

The Hampshire Companies

*NAI Hanson Deal

4Q2017Significant Leases & Sales

Construction

Address Size (SF) Completion Developer Usage

1 Brick Yard Road, Cranbury 1,346,138 2Q2018 Clarion Partners Investment

942 Memorial Parkway, Phillipsburg 1,000,200 1Q2019 Bridge Development Partners Investment

171 River Road, Piscataway 725,400 2Q2018 Rockefeller Group Build-to-Suit

67-71 Blanchard Street, Newark 706,000 3Q2018 The Morris Companies Build-to-Suit

152 Route 206, Hillsborough 700,000 2Q2018 Industrial Realty Group Investment

1080 King Georges Post Road, Edison 635,086 3Q2018 Arizona Beverage Company Build-to-Suit

329-359 Wyckoff Mills Rd, East Windsor 635,000 1Q2018 Exeter Property Group Investment

203 Windsor Center Dr, Hightstown 567,000 1Q2018 Aurobindo Pharma USA, Inc. Build-to-Suit

700 Kapkowski Road, Elizabeth 540,000 2Q2018 Prologis Investment

58 Station Road, Cranbury 504,428 2Q2018 Prologis Investment

150 Totowa Road, Wayne 459,822 2Q2018 Peykar Family Properties of Wayne Investment

2 Turner Place, Piscataway 451,800 2Q2018 F. Greek Development Investment

1065 Cranbury South River Road, Monroe Township

450,330 1Q2018 IDI Gazeley Investment

300 Prospect Plains Road, Cranbury 416,300 2Q2018 The Sudler Companies Investment

400 Docks Corner Rd, Monroe Township 365,400 1Q2018 Matrix Development Group Investment

286 Prospect Plains Road, Cranbury 341,982 2Q2018 The Sudler Companies Investment

171 River Road, Piscataway 311,040 2Q2018 Rockefeller Group Investment

2270 US Highway 130, Dayton 305,500 1Q2018 Adler Development Investment

46 Meadowlands Parkway, Secaucus 302,727 1Q2018 Hartz Mountain Industries, Inc. Investment

2349 US Highway 130, Dayton 295,350 2Q2018 Clarion Partners/F. Greek Dev. Investment

256 Vanderpool Street, Newark 290,063 3Q2018 Penwood Real Estate Investment Management

Investment

100 Performance Drive, Mahwah* 271,195 1Q2018 Sitex Group Investment

1400 Randolph Avenue, Avenel 242,296 3Q2018 Principal Real Estate Investors Investment

191 Blair Road, Avenel 198,854 1Q2018 Sitex Group Investment

1 Eastern Road, Kearny 197,000 1Q2018 Hugo Neu Realty Mgmt Investment

Rendering of 256 Vanderpool Street, NewarkRendering of 58 Station Road, Cranbury

Under Construction

*NAI Hanson is handling the leasing.

Construction

Address Size (SF) Completion Developer Usage

5 Ethel Boulevard, Wood-Ridge 193,805 4Q2018 Duke Realty Corporation Investment

225 Raritan Center Parkway, Edison 190,293 2Q2018 Federal Business Centers Investment

1500 Blair Road, Carteret 156,067 1Q2018 The Hampshire Companies Investment

Bergen Avenue, Kearny 130,043 1Q2018 Hartz Mountain Industries, Inc. Investment

400 Huyler Street, South Hackensack 115,611 3Q2018 Forsgate Industrial Partners Investment

70 Carter Drive, Edison 100,250 2Q2018 Wick Companies Investment

74 Carter Drive, Edison 80,250 1Q2018 Wick Companies Build-to-Suit

Rendering of Bergen Avenue, Kearny Rendering of 400 Huyler Street, South Hackensack

Under Construction

• The vacancy rate decreased 0.2% from the previous quarter ending the fourth quarter at 3.9%. The rate is down 0.1% from the fourth quarter of 2016 and down 1% from the fourth quarter of 2015.

• Average asking rates ended the quarter at $7.12 per square foot, which is a decrease of $1.12 per square foot from the third quarter of 2017. The rate is up $0.20 per square foot from the fourth quarter of 2016 and up $0.85 per square foot from the fourth quarter of 2015.

• Leasing registered over 1,470,000 square feet in the fourth quarter and there was over 417,000 square feet absorbed. There was over 3,000,000 square feet leased at the end of 2017. Top fourth quarter transactions included Allied Beverage Group leasing 540,000 square feet at 700 Kapkowski Road in Elizabeth and Fabuwood renewing their 126,672 square feet at 100 Industrial Drive in Jersey City.

• A top sale transaction included 10 Fadem Road in Springfield. The 44,243 square foot building sold from Tulfra Realty to HSJE Realty LLC for $4,825,000 or $109.06 per square foot.

Trends

MARKET SIZE 138,570,748 SF VACANT AVAILABILITY (SF) 5,460,038 SF VACANT AVAILABILITY (%) 3.9% 4Q17 LEASING ACTIVITY 1,473,347 SF TOTAL 2017 LEASING ACTIVITY 3,063,442 SF

AVERAGE ASKING RATE $7.12 PSF4Q17 NET ABSORPTION 417,401 SFTOTAL 2017 NET ABSORPTION 206,071 SFUNDER CONSTRUCTION 1,590,114 SFDELIVERED 204,176 SF

Market Snapshot

100 Industrial Drive, Jersey City

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

7.0%

$4.00$4.50$5.00$5.50$6.00$6.50$7.00$7.50$8.00$8.50

Average Asking Rate vs. Vacant Available Rate


SubmarketsPorts

ASKING RATE$1.12

NET ABSORPTION276,188 SF

LEASING ACTIVITY841,750 SF

4Q2017 vs. 3Q2017

VACANCY RATE0.2%

MARKET SIZE 103,721,771 SF VACANT AVAILABILITY (SF) 3,427,061 SF VACANT AVAILABILITY (%) 3.3% 4Q17 LEASING ACTIVITY 1,225,204 SF TOTAL 2017 LEASING ACTIVITY 4,537,770 SF

AVERAGE ASKING RATE $8.04 PSF4Q17 NET ABSORPTION 1,867,453 SFTOTAL 2017 NET ABSORPTION 1,887,758 SFUNDER CONSTRUCTION 3,091,336 SFDELIVERED 2,424,419 SF

Market Snapshot

20 Duke Road, Piscataway

0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%

$4.50$5.00$5.50$6.00$6.50$7.00$7.50$8.00$8.50



Submarkets

ASKING RATE$0.67

VACANCY RATE0.6%

NET ABSORPTION2,321,711 SF


4Q2017 vs. 3Q2017

Exit 10/12

• Vacancy decreased slightly from the previous quarter ending the fourth quarter at 3.3%. The rate is up 1% from the fourth quarter of 2016 and down 1.9% from the fourth quarter of 2015.

• The Exit 10/12 submarket saw an increase of $0.67 per square foot in the average asking rate from the previous quarter. The rate ended the quarter at $8.04 per square foot. Asking rates are up $1.47 per square foot from the fourth quarter of 2016 and up $2.21 per square foot from the fourth quarter of 2015.

• There was over 1,225,000 square feet leased in the fourth quarter and over 4,500,000 square feet leased for the year. Over 1,800,000 square feet was absorbed in the fourth quarter. Top lease transactions included Best Buy leasing 725,400 square feet at 171 River Road in Piscataway and Global Transport Logistics leasing 253,575 square feet at 276 Old New Brunswick Road in Piscataway.

• 20 Duke Road in Piscataway sold this quarter from Penwood Real Estate Investment Management to MSN Pharmaceuticals, Inc. for $17,315,964 or $85.02 per square foot

Trends

MARKET SIZE 93,715,149 SF VACANT AVAILABILITY (SF) 3,573,780 SFVACANT AVAILABILITY (%) 3.8% 4Q17 LEASING ACTIVITY 532,231 SF TOTAL 2017 LEASING ACTIVITY 3,162,303 SF

AVERAGE ASKING RATE $8.76 PSF4Q17 NET ABSORPTION 488,282 SFTOTAL 2017 NET ABSORPTION 671,445 SFUNDER CONSTRUCTION 1,129,408 SFDELIVERED 539,521 SF

Market Snapshot

430 Industrial Avenue, Teterboro

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

$4.00

$5.00

$6.00

$7.00

$8.00

$9.00

$10.00



SubmarketsMeadowlands

• The vacancy rate ended the fourth quarter at 3.8%, down slightly from the previous quarter. Compared to the fourth quarter of 2016, the rate is up 0.1% and compared to the fourth quarter of 2015, the rate is down 1.5%.

• The Meadowlands submarket saw an increase in average asking rate ending the quarter at $8.76 per square foot. Asking rates are up $0.91 per square foot from the fourth quarter of 2016 and up $2.05 per square foot from the fourth quarter of 2015.

• Over 3,100,000 square feet was leased in 2017 and over 530,000 square feet in the fourth quarter alone. Net absorption registered over 488,000 square feet. Top transactions included Market Gauge Asset Management LLC, who leased 79,772 square feet at 205 Campus Drive in Kearny and Goffa International Corp who leased 26,900 square feet at 235 Murray Hill Parkway in East Rutherford. NAI Hanson facilitated the transaction at 235 Murray Hill Parkway.

• A top sale transaction included LBA Realty who purchased 430 Industrial Avenue in Teterboro from Richard Catena Acura. LBA Realty purchased the 132,000 square foot warehouse for $16,150,000 or $122.35 per square foot.

TrendsASKING RATE

$0.14VACANCY RATE

0.3%NET ABSORPTION

537,037 SFLEASING ACTIVITY

217,293 SF

4Q2017 vs. 3Q2017

“Properties in New York, particularly Brooklyn, that have been redeveloped from industrial uses to the higher and better residential and retail uses over the last several years are not going back to industrial in our lifetime. This will continue to increase the demand to warehouse and distribution as close to New York City as possible. I think the Meadowlands will continue to benefit the most from this trend. Demand is strongest for new class A industrial space and should only get stronger in 2018.”

Tom Vetter, siorSenior Vice President, NAI James E. Hanson

MARKET SIZE 63,663,309 SF VACANT AVAILABILITY (SF) 995,504 SF VACANT AVAILABILITY (%) 1.6% 4Q17 LEASING ACTIVITY 4,258,802 SF TOTAL 2017 LEASING ACTIVITY 9,185,989 SF

AVERAGE ASKING RATE $6.56 PSF4Q17 NET ABSORPTION 885,470 SFTOTAL 2017 NET ABSORPTION 2,883,597 SFUNDER CONSTRUCTION 4,076,508 SFDELIVERED 0 SF

Market Snapshot

58 Station Road, Cranbury

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

$3.00$3.50$4.00$4.50$5.00$5.50$6.00$6.50$7.00



Submarkets

ASKING RATE$0.08

VACANCY RATE0.5%


LEASING ACTIVITY1,625,914 SF

4Q2017 vs. 3Q2017

Exit 8A

• One of the lowest vacancy rates was seen in the Exit 8A submarket. The submarket ended the quarter with a vacancy rate of 1.6%. Vacancy is down 1% from the fourth quarter of 2016 and down 4.1% from the fourth quarter of 2015.

• The average asking rate ended the quarter at $6.56 per square foot. Rates are up $1.10 per square foot from the fourth quarter of 2016 and up $1.73 per square foot from the fourth quarter of 2015.

• In addition to the low vacancy rate, this submarket saw the highest activity in leasing with over 4,200,000 square feet leased and over 9,100,000 square feet leased for 2017. There was over 885,000 square feet absorbed at the end of the quarter. Top transactions included Williams-Sonoma renewing their 1,351,237 square feet at 340 Middlesex Center Boulevard in Monroe Township; Home Depot leasing 504,428 square feet at 58 Station Road in Cranbury; and Cooper Electric renewing 97,961 square feet at 24 Engelhard Drive in Monroe.

• A top sale transaction included the sale of 44 Station Road and 48 Station Road in Cranbury. Clarion Partners purchased the properties from a joint venture between Rockefeller Group and Alfieri LLC for $168,500,000 or $135.78 per square foot.

Trends

MARKET SIZE 53,151,892 SF VACANT AVAILABILITY (SF) 2,036,907 SF VACANT AVAILABILITY (%) 3.8% 4Q17 LEASING ACTIVITY 376,607 SF TOTAL 2017 LEASING ACTIVITY 1,091,478 SF

AVERAGE ASKING RATE $7.91 PSF4Q17 NET ABSORPTION 264,229 SFTOTAL 2017 NET ABSORPTION 7,683 SFUNDER CONSTRUCTION 459,822 SFDELIVERED 0 SF

Market Snapshot

95 Demarest Drive, Wayne

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

$4.00$4.50$5.00$5.50$6.00$6.50$7.00$7.50$8.00$8.50



Submarkets

ASKING RATE$0.32

VACANCY RATE0.3%



4Q2017 vs. 3Q2017

Route 46/23/3 Corridor

• Vacancy increased slightly from the previous quarter ending at 3.8%. The rate is also up 0.4% from the fourth quarter of 2016 and down 1.5% from the fourth quarter of 2015.

• There was an increase of $0.32 per square foot in the average asking rate from the previous quarter. The quarter ended at $7.91 per square foot. Average asking rates are up $0.34 from the fourth quarter of 2016 and up $1.93 per square foot from the fourth quarter of 2015.

• Leasing registered over 376,000 square feet at the end of the fourth quarter and over 264,000 square feet was absorbed. There was over 1,000,000 square feet leased for the year. Top transactions included 30,069 square feet leased at 440 Allwood Road in Clifton and 22,220 square feet leased by Delaware Freeport at 1 Entin Road in Clifton. NAI Hanson facilitated the transaction at 1 Entin Road.

• 95 Demarest Drive in Wayne was a top sale transaction for the quarter. CenterPoint Properties purchased the 163,253 square foot Class A distribution building for $43,263,000 or $265.01 per square foot from Rockefeller Group. FedEx occupies the building on a 15 year lease.

Trends


AVERAGE ASKING RATE $5.31 PSF4Q17 NET ABSORPTION 945,663 SFTOTAL 2017 NET ABSORPTION 1,393,616 SFUNDER CONSTRUCTION 1,215,750 SFDELIVERED 486,630 SF

Market Snapshot

159 Milford Road, East Windsor

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

$3.00

$3.50

$4.00

$4.50

$5.00

$5.50



Submarkets

ASKING RATE$0.12

VACANCY RATE1.5%


LEASING ACTIVITY

117,818 SF

4Q2017 vs. 3Q2017

• Vacancy, which decreased 1.5% from the previous quarter, ended the year at 3.6%. The rate is down 0.8% from both the fourth quarter of 2016 and from the fourth quarter of 2015.

• The average asking rate ended the quarter at $5.31 per square foot. Asking rates are up $0.82 per square foot from the fourth quarter of 2016 and up $1.39 per square foot from the fourth quarter of 2015.

• There was over 518,000 square feet leased in the fourth quarter and over 945,000 square feet absorbed. The year ended with over 1,900,000 square feet leased. A top lease transaction for the quarter included LG Electronics USA leasing 410,300 square feet at 159 Milford Road in East Windsor, a building which was completed in November 2017.

• A top sale transaction included 1585 N Olden Avenue in Trenton. W.W. Grainger, Inc. sold the 21,798 square foot warehouse for $1,440,000 to Olden Automotive Enterprises, or $66.06 per square foot.

Trends

Exit 7A

MARKET SIZE 37,416,888 SF VACANT AVAILABILITY (SF) 2,948,250 SF VACANT AVAILABILITY (%) 7.9 % 4Q17 LEASING ACTIVITY 257,535 SF TOTAL 2017 LEASING ACTIVITY 1,022,821 SF

AVERAGE ASKING RATE $6.77 PSF4Q17 NET ABSORPTION 388,011 SFTOTAL 2017 NET ABSORPTION 837,691 SFUNDER CONSTRUCTION 35,000 SFDELIVERED 0 SF

Market Snapshot

19 Chapin Road, Pine Brook

5.0%5.5%6.0%6.5%7.0%7.5%8.0%8.5%9.0%9.5%10.0%

$4.00$4.50$5.00$5.50$6.00$6.50$7.00$7.50



Submarkets

ASKING RATE$0.21



4Q2017 vs. 3Q2017

Morris Region

VACANCY RATE1.4%

• The Morris Region has the highest vacancy rate out of all the submarkets in Northern and Central New Jersey. The quarter ended with a vacancy rate of 7.9%. The rate is down 1.6% from the fourth quarter of 2016 and is up 2.2% from the fourth quarter of 2015.

• The average asking rate ended the quarter at $6.77 per square foot. This is an increase of $0.08 per square foot from the fourth quarter of 2016 and an increase of $0.62 per square foot from the fourth quarter of 2015.

• There was over 257,000 square feet leased at the end of the quarter and over 388,000 square feet absorbed. Over 1,000,000 square feet was leased for the year. Top lease transactions included 45,654 square feet leased to Immunomedics at 400 American Road in Morris Plains and Next Gen IV leasing 28,300 square feet at 181 E Halsey Road in Parsippany. NAI Hanson facilitated the transaction at 181 E Halsey Road.

• A top sale transaction included 19 Chapin Road in Pine Brook. Camber Real Estate Partners and Advance Realty purchased the 529,110 square foot industrial campus comprising of 4 buildings from AEW Capital Management. The properties sold for $52,850,000 or $99.64 per square foot.

Trends


AVERAGE ASKING RATE $9.04 PSF4Q17 NET ABSORPTION 19,894 SFTOTAL 2017 NET ABSORPTION 241,207 SFUNDER CONSTRUCTION 0 SFDELIVERED 0 SF

Market Snapshot

330 S. Van Brunt Street, Englewood

4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

$4.00

$5.00

$6.00

$7.00

$8.00

$9.00

$10.00



Submarkets

ASKING RATE$0.50



4Q2017 vs. 3Q2017

Central Bergen County

VACANCY RATE1.2%

• The Central Bergen County submarket ended the year with a vacancy rate of 4.9%. Vacancy is down 0.2% from the fourth quarter of 2016 and down 0.1% from the fourth quarter of 2015.

• Average asking rates, which are highest in all the submarkets, ended the quarter at $9.04 per square foot. Rates are up $1.70 per square foot from the fourth quarter of 2016 and up $2.35 per square foot from the fourth quarter of 2015.

• There was over 395,000 square feet leased in the fourth quarter and over 19,000 square feet absorbed. For the year, there was over 1,000,000 square feet leased. Top transactions included Admiration Foods leasing 103,000 square feet at 330 S. Van Brunt Street in Englewood and Sanofi leasing 84,237 square feet at 4 Bell Drive in Ridgefield.

• 60 Industrial Road in Lodi sold in the fourth quarter. Arthur Schuster LLC purchased the 53,000 square foot building from JM & E Holdings LLC for $4,550,000 or $85.85 per square foot.

Trends

MARKET SIZE 21,873,339 SF VACANT AVAILABILITY (SF) 1,032,805 SF VACANT AVAILABILITY (%) 4.7% 4Q17 LEASING ACTIVITY 180,775 SF TOTAL 2017 LEASING ACTIVITY 563,467 SF

AVERAGE ASKING RATE $8.77 PSF4Q17 NET ABSORPTION (62,061) SFTOTAL 2017 NET ABSORPTION 453,489 SFUNDER CONSTRUCTION 301,195 SFDELIVERED 0 SF

Market Snapshot

10 Industrial Avenue, Mahwah

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

$4.00

$5.00

$6.00

$7.00

$8.00

$9.00

$10.00



Submarkets

• The Northern Bergen County submarket ended with a vacancy rate of 4.7%. Vacancy is down 2.3% from the fourth quarter of 2016 and down 3.2% from the fourth quarter of 2015.

• The average asking rate, which is the second highest of all the submarkets, ended the quarter at $8.77 per square foot. The rate is down $0.06 per square foot from the fourth quarter of 2016 and up $0.83 per square foot from the fourth quarter of 2015.

• There was over 180,000 square feet leased at the end of the quarter and a negative absorption of over 62,000 square feet. Leasing registered over 563,000 square feet for the year. A top lease transaction included NAI Hanson facilitating the transaction at 70-82 McKee Drive in Mahwah. American Musical Supply leased 27,539 square feet.

• 10 Industrial Avenue in Mahwah was a top sale transaction for the quarter. Northeastern Security Development Corporation purchased the 91,388 square foot warehouse from The Hampshire Companies for $8,000,000 or $87.54 per square foot.

Trends

Northern Bergen County

ASKING RATE$0.04

VACANCY RATE0.3%



4Q2017 vs. 3Q2017

“Leasing velocity in the Upper Route 17 Corridor has been very brisk with recent leases of 40,000 square feet at 50 Spring Street in Ramsey, 27,500 square feet at 70-82 McKee Drive in Mahwah and multiple parties interested in the new 271,000 sf warehouse currently under construction in the Sharp Plaza complex in Mahwah.”

Ken Lundberg, siorSenior Vice President, NAI James E. Hanson

Year End 20172017 Top Hanson Deals

629 Grove StreetJersey City, NJ - 130,963 sf

30 Wesley StreetS. Hackensack, NJ - 90,000 sf

60 Lister AvenueNewark, NJ - 119,268 sf

2501 71st StreetNorth Bergen, NJ - 165,090 sf

24 Roosevelt AvenueSomerset, NJ - 52,800 sf

200 Central AvenueTeterboro, NJ - 74,368 sf

6 Aspen DriveRandolph, NJ - 27,248 sf

700 Bartley Chester RoadFlanders, NJ - 157,822 sf

7777 West Side AvenueNorth Bergen, NJ - 126,000 sf

211 Island RoadMahwah, NJ - 108,237 sf

140 LeGrand AvenueNorthvale, NJ - 82,524 sf

8 Kulick RoadFairfield, NJ - 23,300 sf

LEASED

LEASED

LEASEDLEASED

LEASEDLEASED

SOLD

SOLD SOLD SOLD

SOLD SOLD

30+ Countries

400 Offices

7,000± Market Leaders

For more information, please contact:

William C. Hanson, siorPresident201 488 5800 [email protected]

235 Moore Street 10 Lanidex Plaza WestHackensack, NJ 07601 Parsippany, NJ 07054201 488 5800 973 463 1011naihanson.com

The world’s largest commercial real estate network.

Year End 2017Industrial Market Update

NAI James E. Hanson is the largest independently owned commercial real estate firm in the State with over 60 years of experience in the New Jersey industrial market and one of the largest teams. NAI James E. Hanson currently holds 10 SIOR designations, the most SIORs over any other commercial real estate firm in the State.

year end 2017 · 20 duke rd., piscataway 203,674 $17,315,964 msn pharmaceuticals penwood real...

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