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 40+ years. 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 every major retailer, and for the multitude of ancillary businesses in the ecommerce sector. It’s all about warehousing 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%.For every $1 billion spent on online shopping, users require one million s/f of warehouse space. 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.