Projected rents in some markets justify added development of warehouses and distribution centers.
That’s according to a recent report from commercial real estate firm CBRE.
CBRE analyzed various markets for the gap between rental rates developers can expect to obtain on newly built warehouses and rent needed to cover overall development costs. The former exceeded the latter by upward of 20 percent, the study found.
In New Jersey, the gap was biggest in Central Jersey.
“Central New Jersey’s 21 percent spread between pro forma and breakeven rents is indicative that warehouse development remains extremely profitable,” CBRE Executive Vice President Mindy Lissner said.