Northeast U.S. Logistics Figures Report Q1 2023
Tight vacancy drives record high lease rates
May 3, 2023 3 Minute Read
‒Northeast U.S. industrial & logistics (I&L) average asking rents for all asset classes increased 2.9% quarter-over-quarter and rose 22.2% year-over-year to $14.13 per sq. ft. in Q1 2023.
‒The vacancy rate rose 30 basis points (bps) quarter-over-quarter to 3.8%.
‒Net absorption jumped to positive 12.5 million sq. ft., up from 6.7 million sq. ft. in Q4 2022.
‒Leasing activity totaled 17.3 million sq. ft., unchanged quarter-over-quarter. Leasing activity continued to be dominated by third-party logistics occupiers who accounted for 28% of leasing, followed by e-commerce, who leased 23% of total space leased, and wholesale/retail occupiers , who leased 21% of leased space.
‒Construction completions brought 15.3 million sq. ft. to the market, up 72% from Q1 2022.
‒Due to the high number of construction deliveries and fewer starts, the total square feet under construction dropped to 54.6 million sq. ft. The pre-lease rate for properties under construction ticked up 170 bps quarter-over-quarter to 25%.
‒6.3 million sq. ft. of sublease space was added in Q1 2023. Central NJ accounted for 28% of the total added and Northern NJ accounted for 25% added. The PA markets accounted for 18% each.