New Jersey’s record number of industrial leases amounts to 8.8 million square feet, according to New Jersey Business Magazine. With this, it was ranked as one of the top industrial markets in the country. Amidst a global pandemic, the strength of this market has proven even more beneficial. Even as new virus cases are cropping up, NJ’s industrial sector is still going strong, and it’s bringing the commercial sector along with it.
E-commerce Takes The Place of Traditional Commerce as The Industry Market’s Benefactor
While traditional commerce declined, E-commerce flourished. This is thanks to social distancing and the closing of physical store outlets. Since April 2020, e-commerce deals have made up 75% of all industrial leasing in NJ. The increased demand is thus driving e-commerce companies to upgrade their logistics capacity. Warehouses and cold storage units are being commissioned in droves to serve a growing customer base.
This rise in demand has only been beneficial for the construction industry. Construction project deliveries increased despite the temporary construction ban. By the time the ban was lifted in May, new construction deliveries amounted to more than 6 million square feet. By comparison, last year’s total for the same time interval amounted to only 4.7 million square feet.
Expansion Continues Despite Land Shortage
The rising construction demand comes with its share of disadvantages, however. It has caused the supply of viable real estate to diminish even further. Many companies were not able to gain a footing in prime areas such as the New Jersey Turnpike. Thus, they were forced to look at locations away from their target markets. Still, the lack of space is not discouraging businesses from expanding.
In response to the last real estate near New York City getting bought up, companies are now looking west. Those who were left out are now purchasing properties all along I-78. With this, the upward trend of construction will continue. According to experts at SkidHeaven, the rise in demand for supplies and equipment in NJ can attest to that as well. It’s gotten to such a state that manufacturers across the country are being commissioned to support construction efforts.
Supply Shortages Posing New Challenges
As things currently stand, the industrial sector will be the main factor supporting New Jersey commerce for the foreseeable future. As such, its main weaknesses lie in the availability of supply. Economic hangups can prevent equipment or material manufacturers from operating at full capacity. In the event of that happening, e-commerce logistics will be held back as well.
A good example of such an economic inhibition would be the recent wave of retail and department store bankruptcies. This can have a lasting effect on an already delicate supply chain. If it affects suppliers, NJ businesses will have to find alternate ways to keep stocked.
The pandemic-stricken economy will take a while to recover. Fortunately, New Jersey’s i