A joint venture between New Jersey developers Advance Realty and F. Greek Development will build a 4.1 million square foot logistics park on a 35-acre tract in Linden, N.J. that, when it is finished in 2 years, will be the largest industrial development in the Port of New York and New Jersey region’s history, the two firms said yesterday.
The “Linden Logistics Center,” which the firms said will be completed in late 2020, will be located near Interstate 95 and Newark Liberty International Airport, and 10 miles from the Port of New York and New Jersey, the nation’s third-busiest seaport and the busiest on the eastern seaboard.. By bringing such enormous capacity into a market that can reach up to 100 million consumers in a day’s transit time, the firms and their leasing agent, CBRE, Inc., (NYSE:CBRE) are wagering that U.S. economic growth, international trade activity and, perhaps most significant, the e-commerce boom will continue for the next two years and beyond.
The complex will house eight warehouses with “Class A” status, considered the cream-of-the-crop as such facilities go. Buildings that earn that classification also typically command the highest asking rents.
The announcement comes as the industrial property winds up the eighth year of an unprecedented bull market, one marked by surging demand, higher rents and shrinking vacancies, particularly in markets near seaports. The continued growth of e-commerce, and the massive facilities needed to support its fulfillment, has fueled tremendous demand for industrial space. Market experts see supply and demand coming more into balance next year as additional capacity becomes available. However, no one is predicting that 2019 will auger the end of the bull run.
According to real estate and logistics firm JLL Inc., (NYSE:JLL) New Jersey’s second-quarter industrial vacancy rate—which encompasses the entire state—stood at 3.2 percent, a cycle low for the market. Average asking rents rose to $7.20 per square foot, the 11th consecutive quarterly increase and a 11.3 percent year-over-year gain, according to JLL data. About 5.3 million square feet was leased or sold statewide in the quarter. E-tailer amazon.com, Inc (NASDAQ:AMZN) has a 10.8 million square foot fulfillment presence in the state, JLL said.