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Industrial Vacancy Rate Hits Highest Level Since 2017 in New Jersey Capital

By Mateusz Wnek CoStar Analytics 

The Trenton, New Jersey, metropolitan area posted an average vacancy rate of 4.2% between 2021 and 2023, as newly completed logistics space was easily filled amid the pandemic. Lately, a significant supply-demand imbalance has pushed the measure to 7.7% as of July, the highest reading since the second quarter of 2017.

Tenants who overcommitted to space beyond their long-term needs, such as third-party distributors, have recently been recalibrating their footprints. Markets such as Trenton, Northern New Jersey, and New York have all seen negative absorption, or change in occupied space, totaling at least negative 1 million square feet over the past year.

Across the Trenton area, the second quarter of 2024 culminated in the weakest quarterly showing for industrial space demand since the last three months of 2014. The period also capped 12 months of net absorption totaling a negative 1.1 million square feet.

Ongoing space expansion has added to the headwinds for existing industrial owners. The past year saw 1 million square feet finished across eight projects led by the Lawrence Logistics Center. The nearly 262,000-square-foot warehouse and light manufacturing facility opened its doors in December and is still unoccupied, asking $13.95 per square foot, triple-net.

Amid the supply additions, Trenton’s total industrial space now totals roughly 44.5 million square feet, representing an increase of 2.3% from last year. Properties are mostly concentrated in Trenton, Robbinsville and Hamilton, with the largest clusters situated primarily along routes 1, 130 and 206.

Digging deeper, Hamilton has led the metropolitan area in move-ins and move-outs over the past year. However, move-out activity has far outpaced the amount of space occupied, resulting in a net absorption total during the past 12 months of negative 657,000 square feet. Other notable weak spots were Ewing (-227,000 square feet) and Lawrenceville (-207,000 square feet).

The absence of a demand catalyst has recently weighed on leasing activity across Trenton. For the 12 months through June, leasing volume has decelerated sharply to just 470,000 square feet, down from 3.1 million square feet in the comparable period last year. Accordingly, move-in totals will be limited through early 2025, resulting in average vacancy hovering well above 7% in the near term.

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Sunday, July 7, 2024

J.G. Petrucci breaks ground on Bucks County warehouse, acquires another in Philadelphia

By Paul Schwedelson – Reporter, Philadelphia Business Journal

J.G. Petrucci Co. has broken ground on a 320,250-square-foot warehouse in Bucks County, another example of the firm’s belief in industrial properties along the East Coast.

Asbury, New Jersey-based J.G. Petrucci, along with Boston private equity firm Cabot Properties, are developing the warehouse distribution center at 4626 Somerton Road in Bensalem, near the intersection of I-276 and Route 1.

J.G. Petrucci Co. also recently acquired an industrial building at 717 Callowhill St. in Philadelphia for $8.6 million, according to property records. The building is leased by Grainger Industrial Supply. J.G. Petrucci plans to own and operate the building as is without redeveloping it, a company spokesperson said.

The property’s location, just north of the Vine Street Expressway and near the Benjamin Franklin Bridge, and Grainger’s tenancy attracted J.G. Petrucci to buy the property.

Similar to the Callowhill property, J.G. Petrucci is anticipating a single tenant leasing the future Bensalem warehouse.

“4626 Somerton Road is strategically positioned for warehouse, distribution and manufacturing users alike,” J.G. Petrucci Project Executive Dominick Baker said in a statement. “The project provides significant utility capacity, a strong labor pool and premier access to major Northeastern cities and beyond.”

Construction financing was arranged by JLL, which is also handling the leasing. J.G. Petrucci declined to share development costs. The project is planned to be completed by the end of 2024. J.G. Petrucci is using its in-house firm Iron Hill Construction Management for the project.

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