New Warehouse Deliveries Drive Absorption Gains

Wayne, PA (August 6, 2018) — Newmark Knight Frank (NKF) released its second quarter 2018 industrial market reports for Greater Philadelphia and the I-81/78 Corridor. The combined markets closed the period with 1.3 million square feet of occupancy gains. Despite the positive absorption, the combined vacancy rate rose 50 basis points to 6.4 percent as six properties were delivered. Of the six, five warehouse properties delivered this quarter along the I-81/78 Corridor totaling 3.7 million square feet. Three of the buildings delivered vacant, for a total of 2.4 million square feet. The sixth building, a 1.1 million-square-foot warehouse located in the Southeastern market at 270 Midway Road in Berks County, also delivered vacant.

The Southern New Jersey market recorded 278,921 square feet in positive absorption, rebounding from rare negative absorption in Q1 2018. At midyear, the market posted 106,007 square feet in occupancy gains. Quarter-over-quarter, overall vacancy fell 20 basis points to 3.8 percent, a near record low for the market. The Burlington County submarket led the way with 174,684 square feet in positive quarterly absorption, followed by Camden County with 81,996 square feet and Gloucester County with 22,241 square feet. Both Burlington County and Camden County fell 30 basis points to 3.2 percent, while Gloucester County remained steady at 5.4 percent. The two largest moves were Revel Nail, which occupied 115,681 square feet at 90 Coles Road in Camden County and Ta Chen International occupying 96,529 square feet at 1651 River Road in Burlington County. Additionally, Amazon leased 1.0 million square feet of warehouse space at 1101 East Pearl Street. NKF Senior Managing Director Kurt Montagano said, “The market is stretched tight between e-commerce firms serving the region and companies out of New York and Northern New Jersey searching for cheaper warehouse space. Expect rates to continue to rise under this demand pressure.”

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