Stagnating rent growth continues as price cuts emerge in top-tier submarkets

As rent growth has remained relatively flat over the last few quarters, up 2.5% year over year, price cuts in a handful of preeminent submarkets have begun. Port and interstate-centric submarkets such as Bergen Central, Newark, and Linden/Elizabeth are measuring modest declines in asking rents from 12 months prior. Vacancy, measuring 6.2% and up 240 basis points year over year, will continue to weigh on the market as the construction pipeline of 10.7 million square feet (msf) remains 92.0% available. From 2019 through 2023, yearly net absorption averaged 8.4 msf, with over 9.0 msf of available speculative construction still underway, there remains about one year’s worth of warehouse supply in the pipeline alone. The headwind fighting near-term rent growth is most likely sustained vacancy at new higher levels, setting the stage for further cuts to ‘top of market’ pricing.

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