Rent growth tapers; new industrial product continues to fuel upward vacancy

Average asking rents have begun to flatline in the Northern New Jersey industrial market, up 4.7% year over year but nearly flat over the last few quarters. Running in step with slowing rent growth has been climbing vacancy, up 270 basis points (bps) year over year, primarily fueled by the delivery of speculative industrial developments over the last several quarters. The market’s construction pipeline delivered 16.5 million square feet (msf) in 2023, while another 3.8 msf, all speculative development, delivered in Q1 2024. In fact, inventory built in 2023 and 2024 make up 27% of current market vacancy, nearly 11.0 msf in total.

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