Woodbridge, NJ, January 24, 2024 – In a market where industrial assets continue to account for approximately 74% of all transaction activity, and office and retail remain in a virtual tie at 13% each, NAI DiLeo-Bram & Co. (NAIDB) reports Morris and Middlesex counties were the most actively traded during H2 2023 within the Northern and Central New Jersey submarkets it tracks. In fact, the latter had the highest sales volume overall, with industrial topping off at $386MM.
According to the NAIDB 2023 Winter Capital Markets Snapshot, sourced by NAIDB Research, Morris continues to shine as the only county surpassing its five-year average in total CRE sales. The county also holds the distinction for leading in office sales for the second half of last year with transactions nearing $100MM.
“The increase in interest-rates during 2023 disrupted the markets we track within the industrial, office and retail sectors,” said NAIDB COO David A. Simon, SIOR. “The sales volume was about 32% lower in H2 2023 compared with the same time period in 2022. However, the long stretch of interest-rate hikes appears to have finished, which will free up capital that has been sidelined during this adjustment period.”
NAIDB’s Market Snapshot focuses on Northern and Central New Jersey across the seven counties in which the firm is most active. These include Morris, Essex, Union, Middlesex, Somerset, Mercer and Hunterdon.
In the market report, NAIDB details the following for the industrial, office and retail sectors in Central and Northern New Jersey:
- Industrial: This property category continues to trade at relatively high prices. While prices have dropped to an average $239/SF, a decrease from $265/SF in H1 2023, the warehouse/logistics sector remains impressive as compared to 2019’s pre-pandemic pricing of $122/SF. For industrial buildings over 100K SF specifically, the average price is $207/SF, equating to a doubling of pre-pandemic price levels for space of this size. Industrial accounts for an aggregate volume of 46 trades / $116MM in transactions during H2 2023.
- Office: Tied for the second-place slot for transaction-volume percentage with retail, office secured 18 trades during H2 2023. As compared to YOY, this sector had a drop-off in aggregate value ($208MM) and PSF. Morris County recorded two of the top three sales transactions in this category [Morristown Professional Plaza and The Offices at Fox Hill] totaling almost $100MM. The third was Federal Business Centers’ acquisition of 1090 King Georges Post Rd., in Edison.
- Retail: This property sector tied office for 13% of the sales volume within the state’s northern and central markets for H2 2023, dropping YOY by 50% to 19 sales in H2 2023. This dipped from $225MM to $198MM in recorded sales.
As part of its highly successful 85+ years in the commercial real estate industry, NAIDB maintains a New Jersey-centric focus on specific property sectors across its geographic region of specialization. While concentrating on these markets, the firm’s brokerage professionals provide expertise to a diverse roster of clients, ranging from private businesses to institutional entities. As a result of its effective business strategy, NAIDB is able to pivot based on economic trends, allowing its brokerage team to collaborate internally and meet the needs of its clients in any given cycle.
Based in Woodbridge, N.J., NAIDB is a member of NAI Global, a leading global commercial real estate advisor with 325+ offices and 5,800 professionals. NAI Global completes in excess of $20B in worldwide commercial real estate transactions annually. Leveraging the powerful support of the NAI Global platform, NAIDB offers a full suite of commercial real estate services backed by the personalized service and knowledge of a local firm with the resources of a global company.