Northern New Jersey Industrial Market Report

Supply chain normalization and easing port throughput drive near-term challenges. Last year marked the end of a more than decade-long period of declining vacancy and robust net absorption, with more than 4 million square feet returned to the market on net by the end of December. A shrinking delivery slate should ease the impact on fundamentals this year, with early indicators showing development decreasing further out. On the demand side, supply chain normalization is also responsible for ebbing leasing appetites. Although the Port of New York and New Jersey will remain a prime underlying demand driver for warehouse space, the resumption of operations at Southern California ports has taken some near-term onus off eastern hubs. Labor relations also present a risk, as the contract between the International Longshoremen’s Association and U.S. Maritime Alliance is up for renewal in 2024. Union leaders have signaled a willingness to strike, which could lead to similar disruptions along the East Coast as those seen at western ports in 2022.