Slowed leasing activity and rise of sublease availability hint at cooling demand

The Northern New Jersey industrial market may be showing it's first signs of cooling demand. While vacancy remains unchanged and near historic lows, quarterly leasing activity, which has dipped 35% from Q4 and 50% from Q1 2022, may be the leading indicator to point to as tenants begin to deploy a wait-and-see approach. Consumer spending is off to a strong start in 2023. However, consumer goods and brick-and-mortar retailers are reportedly treading with caution. That caution can be seen in the sublet market, of which available sublet space has climbed 81% since this time last year. Two notable sublease availabilities have come on-line in the first quarter, at 600 Ridge Road in Exit 10 and 100 Performance Drive in Bergen North. Both are Class A, built since 2018 and come from occupiers in the consumer goods industry.

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