Northern New Jersey Retail Investment Forecast
Deliberate Development Bolsters Property Performance;
Investors Stick With Proven Tenants
Muted supply growth benefits long-restrained revenue growth. While Northern New Jersey's job recovery is making headway, a substantial gap remains between employment growth projections and the pre-pandemic total; metro incomes, however, are still some of the nation's highest, fueling large amounts of discretionary spending. Despite subdued workforce expansion, retail sales surged last year and are expected to stay elevated throughout 2022. In addition to heightened consumer purchases, fundamentals are backstopped by the record-low amount of space delivered in 2021. While higher, this year's construction pipeline is still conservative, as developers remain vigilant of the risks of oversupply. A leaner pipeline may be particularly beneficial, as the long-term growth of asking rents in Northern New Jersey has been more subdued, in comparison to nearby markets. Despite this, one of this year's largest community centers delivers to Union County, where the average asking rent for multi-tenant assets has remained near $20 per square foot since the onset of the financial crisis.