Vacancy in New Jersey's industrial market fell to its lowest level in five years after a strong fourth quarter in 2013, according to a new report from Jones Lang LaSalle.
The brokerage firm said the market "outperformed even the most optimistic expectations by a wide margin" to end the year, dropping overall vacancy to 7.8 percent going into 2014. Net absorption for leased warehouse and distribution space totaled 3.7 million square feet for the quarter, led by the submarkets along the New Jersey Turnpike.
The increase in occupied space for the quarter was the highest in 10 years, coming after three quarters that JLL said showed "slow but steady growth" in leasing. But the firm also pointed to the record-setting sales volume that took place in 2013, driven by a favorable lending environment and the overall strength of the industrial market.
The biggest deal to end the year includes Prologis Inc.'s sale of a 28-property portfolio in Fairfield, which the Hampshire Cos. acquired for $86 million, JLL said in its report.
Meantime, JP Morgan Asset Management paid $47.5 million to acquire eight Meadowlands-area buildings from Wilson Associates.
Among the largest new leases in the quarter was NFI's 405,000-square-foot deal at the Prologis Port Reading Business Park in Woodbridge, where construction is expected to begin this quarter. In South Brunswick, IndCor Properties signed logistics company Genco to a 218,000-square-foot deal on Prospect Plains Road.
The strongest activity throughout the year came in submarkets with good access to the Port of New York and New Jersey, JLL said. The firm noted more than half of the 6.2 million square feet of development activity underway in the fourth quarter was located in those submarkets.
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