New Jersey’s Class “A” Industrial Real Estate Conundrum: 2024 Sees A Huge Surge in Deliveries of Brand New Constructed Properties!

The industrial real estate sector in New Jersey faces a significant challenge. Many new industrial spaces are slated for completion in 2024, just as tenant preferences shift because of concerns about a slowing economy that potentially complicates the market landscape.

Currently, 18.2 million square feet of industrial space are under construction in New Jersey, equivalent to roughly half the size of Central Park in New York City. 34 “New Class A Type Buildings” are now under construction or will be delivered in 2024. Alarmingly, 90% of this upcoming space has not yet been leased. This added “Brand New” Industrial Real Estate that is now destined for the New Jersey Market(s) creates tremendous opportunities for tenants and purchasers as the formerly “tight markets” start loosening up the developer’s/landlord’s firm grip on pricing any available space.

This influx of new space, particularly concentrated in Northern New Jersey, is expected to impact market dynamics negatively. Predictions suggest that the average vacancy rate for industrial spaces could increase to 5.1% in 2024. This would be a notable rise and the first of its kind since 2012.

There are 34 “Brand New Class A Type” Industrial properties of at least 200,000 square feet that are either currently under construction or will be delivered throughout the State of New Jersey in 2024.

Our database has all the information, specifications and facts about each of them as well as the millions of square feet that are available in New Jersey’s vast 900 million “plus” square foot Industrial Real Estate Market!

Middlesex County is at the forefront of this new construction wave, with 4.7 million square feet underway, akin to nearly half the total floor space of the Pentagon.

However, there is a growing preference for developing larger, mega-sized properties (over 200,000 square feet)—equivalent to about twice the size of a Manhattan city block. These properties, which represent 67% of ongoing construction, have a low pre-lease rate of just 8%. This situation could lead to increased concessions by developers in early 2025.

Tenant preferences are evolving, with a noticeable trend towards mid-sized buildings, ranging from 50,000 to 150,000 square feet—comparable in size to an NFL football field. This shift is challenging the leasing landscape for larger spaces, potentially leading to long-term vacancies or necessitating a reevaluation of use for these larger, hopefully single-tenanted and more extensive developments. Such changes underscore New Jersey’s industrial real estate market’s dynamic nature and signal a critical adjustment period for developers and property owners until more positive signs of increased demands for space akin to 2020- through the heights of demand for space into the 1st quarter of 2023.

In the face of New Jersey’s industrial real estate evolution, the emergence of new Class “A” spaces presents an unparalleled opportunity for tenants and buyers to capitalize on more favorable market conditions.

Corporate America Realty & Advisors can level the playing field for tenants and buyers, whether looking for “new space” or deciding to ” stay in place”!

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