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Northern New Jersey Has the Fastest Industrial Rent Growth on the East Coast

CoStar Market Insights: Industrial Vacancies Are Near Record Lows
September 24, 2018
Blue Apron leased out an entire 495,000-square-foot distribution center in Linden, New Jersey, (pictured) in 2016.



The industrial market continues to be a bright spot in Northern New Jersey commercial real estate. As of September, year-over-year rent growth was 7.8 percent, the highest of any East Coast market. This figure ranks sixth nationally among markets with more than 100 million square feet of inventory.

Rent growth in 2018 builds upon a run of strong performance. Rent growth is on pace to exceed 4 percent for the fifth consecutive year. Gains topped 8 percent last year and reached about 6 percent in 2015 and 2016.

Northern New Jersey industrial vacancies are near a record low, at 4.9 percent. The market is on pace to record a sixth consecutive year of positive demand. Cumulative net absorption since the start of 2013 is just short of 10 million square feet.

Within the industrial sector, the most robust demand has come for logistics space. Warehouse and distribution space accounted for about 90 percent of the overall industrial market’s total demand over the last six years. Flex space accounts for most of the remaining 10 percent, while specialized industrial and manufacturing demand was cumulatively negative during this stretch.

The logistics market has certainly benefited from the rise of e-commerce. Northern New Jersey offers a favorable location to meet the desire of today’s consumers for quick delivery of goods and services.

Per Choose New Jersey, a local economic development organization, distribution centers in the state can reach more than 22 million consumers within a two-hour drive, and 40 percent of the nation’s population within a day. In the past three years, companies like Allied Beverage Group and Blue Apron have leased large distribution centers in the market.

Despite recording slightly negative net absorption, fundamentals are well-positioned in the specialized industrial and manufacturing segment. Conversions and demolitions have removed older and obsolete properties from the inventory. Vacancies are at a post-recession low and specialized industrial recorded stronger rent growth over the past year than logistics or flex space did.


CoStar Market Insights provides a snapshot of recent real estate trends. The CoStar Market Analytics team monitors commercial and multifamily real estate across 390 metro areas, with a granular understanding of the projects, players and economic trends that move these markets.

Learn how CoStar Market Analytics can add to your market knowledge, helping to minimize risk and maximize returns.

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