Construction deliveries and climbing vacancy overshadow positive absorption

Vacancy continues to climb in the market, up 250 basis points (bps) year over year, on the back of newly constructed supply. Speculative construction accounts for 4.7 million square feet (msf) of the nearly 5.9 msf delivered this quarter, of which 51% remains unleased. Both the Morris and Meadowlands submarkets delivered over 600,000 square feet (sf) of speculative and available product this quarter, with projects like TEB Transport Center, 1879 Route 46 and Bridge Point East Hanover all completing before year end. However, net absorption shifted positive in Q4 2023, with nearly 1.0 msf of positive net absorption across the market. The largest such move stems from the Route 78 West submarket, as Flexport, following its Shopify Logistics/Deliverr acquisition, opens its 1.2 msf distribution center at Bridge Point 78.

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