Why Is the NJ Industrial Real Estate Market Still So Hot? The Internet. Internet retail sales. That's the difference keeping our current hot industrial market hitting lease and sale price highs unseen in my 40+ years in the business.
Technology is making the difference as it always does.
Shopping is easier than ever online and on your phone. Industrial real estate is the choice of online sales companies for business. It’s all about wareshousing and logistics.
Here is what is important to note for the New Jersey industrial market: Every time internet retail sales grow by approximately 5%, our vacancy rate dips by approximately 2%.
Ecommerce represented a growing share of the retail market in 2018, taking a 14.3% share of total retail sales last year, up from 12.9% in 2017. More significant is that ecommerce sales represented more than half, or 51.9%, of all retail sales growth. This is the largest share of growth for purchases made online since 2008. Correspondingly, New Jersey industrial market sales prices have risen approximately 40 to 60%, depending on the submarket, in the last 3 years.
You might say, “As internet sales grow, so does the industrial real estate market grow.” - SB
Click here to download the full report: https://bussel.com/em/pdf/firstauarter2019brcreview.pdf