The Surge in Warehouse Construction
There is clearly a scramble for buildable parcels of land, especially for warehouse use. New Jersey is in the middle of an ongoing warehouse construction boom as a result of the surging demand created by online shopping, where available space is needed for inventory. Demand for space especially in Northern and Central New Jersey is exceeding supply for the fourth quarter of 2021.
The vacancy rate for warehouses fell to 2.7% from 4.1% a year earlier. In addition the vacancy rate fell from the previous quarter to the fourth quarter from 2.9%. Also, the average rent received per square foot climbed from $10.72 to $11 per square foot. Where the biggest increases were reported, the rents received for the top class of warehouse space for average asking rent shot up 46% year-over-year.
The demand for warehouse space in Northern New Jersey is actually creating a demand for warehouse space in Southern New Jersey. The concern is that if warehouses are built, they might overwhelm the local roads with trucks and volume, impacting the quality of life in those residential areas. To date, no state agency has stepped forward to regulate the booming warehouse industry. Yet, the competition for available buildable warehouse land has risen in New Jersey to the point that New Jersey is no longer seen as a combination of local regions but a single market. Logistics companies that are having capacity and shortage issues in Northern New Jersey are pursuing opportunities in Southern New Jersey such as Burlington County. At this point there isn’t any available buildable land off the turnpike entrance in South Brunswick. As demand increases and shortages begin to wear upon the logistics companies, it’s most likely that it could lead to the redevelopment of what is now under-utilized office parks.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.