New Jersey warehouse construction up
Nearly 5.3 million square feet of industrial and warehouse space is being developed in northern and central New Jersey during the first quarter, compared to 3.6 million square feet under construction in the fourth quarter of last year, according realtor Grubb & Ellis Co.
“Central New Jersey provided the setting for a large portion of this new construction activity, where the product of choice consisted of big-box distribution facilities,” said Grubb & Ellis in its first quarter review of the market. “More than 5 million square feet out of the 5.3 million square feet under construction in early 2007 was occurring in central New Jersey.
“The largest speculative endeavor underway involved two warehouses totaling nearly 1.3 million square feet being developed by Panattoni in Carteret,” it noted.
Grubb and Ellis said, “redevelopment of former industrial sites is expected to accelerate in the Garden State as developers pursue opportunities where large tracts of available land are in short supply.”
In Teterboro, Honeywell International will shut down a former Bendix plant, and has a tentative deal to sell the site to Catellus Development, a unit of ProLogis, Grubb and Ellis said.
A gap between rental rates in northern and central New Jersey is closing, the realtor said. Today, asking rents for general industrial and warehouse/distribution space averages $6.14 in northern New Jersey, about $1 more than the $5.17 average it calculated for central New Jersey. In early 2005, it said the premium was about $1.30 in the northern part of the state.
Some of the major first quarter leases highlighted in the report include:
* LG Electronics USA, 750,000-square-foot warehouse in South Brunswick for a Northeast distribution center.
* Kuehne + Nagel’s, 400,000 square feet, from Rockefeller Group Development Corp. in Cranbury.
* Laser Logistics, 390,400 square feet in South Brunswick.
* VSE Corp., 103,400 square feet in South Brunswick.
* Winebow, a wine importer, 187,000-square-foot warehouse in Pine Brook.
Large sale/purchase deals highlighted by Grubb & Ellis included:
* TA Associates, 521,800-square-foot facility in Cranbury from Russ Berrie & Co. for $31.8 million. The maker of stuffed animals and other gifts leased back half the building.
* Clothing company Central Mills/Freeze, a 318,000-square-foot facility in South Brunswick, from McMaster-Carr Supply Co. for $16.5 million.
* Logistics company Propak Development, 115,000-square-foot facility, also in South Brunswick, from Alpha Garments for $7.4 million. Propak is relocating operations from Edison.
* Hampshire Cos., 121,000-square-foot industrial building in Fair Lawn, from H.J. Heinz for $7.8 million.
* “92 Route 46 LLC,” 134,000-square-foot building, also in Fair Lawn, from Darling Corp. for $5 million.
* Seagis, 51,000-square-foot building in Teterboro, from Sun Chemical for $8.4 million.
* Textile company Marcotex International, 95,000-square-foot building in Kearny, for $5.9 million. Marcotex will reportedly occupy about one-third of the building and rent the remainder to an existing tenant.