3Q Industrial Market Overview. Industrial Market Overview

2013 3Q 3Q Industrial Industrial Market Overview Market Overview Northern & Central Northern & Central Jersey NewNew Jersey 3Q Industrial Market O...
Author: George McDonald
0 downloads 3 Views 5MB Size
2013

3Q

3Q Industrial Industrial Market Overview Market Overview Northern & Central Northern & Central Jersey NewNew Jersey

3Q Industrial Market Overview

Table of Contents

1. Overview 2. Leasing Activity 3. Sales Activity 4. Construction Activity 5. Meadowlands 6. Route 80 Corridor 7. Eastern Morris 8. Ports 9. Exit 10/12 10. Exit 8A 11. Exit 7A 12. Our Industrial Team

Northern & Central New Jersey

3Q Industrial Market Overview

Overview

Northern & Central New Jersey

The Northern and Central New Jersey Industrial market consists of 12 counties with 6,974 properties totaling 625,277,560 sf, of which 47,707,338 sf is currently available for lease.

Essex and Passaic Counties boast the lowest vacancy rates in the State, currently 5.3% and 5.7% respectively, while Middlesex, Bergen and Hudson counties accounted for 55% of all leasing activity during 3Q 2013. The majority of tenants were attracted to the Exit 7A and Exit 10/12 submarkets, the Meadowlands and the Exit 8A. The Exit 7A submarket experienced the majority of leasing activity, currently 1,245,955 sf with a 9.3% vacancy rate and an asking rental rate of $4.17 psf.

9.1%

9.3% 9.1%

9.1%

9.2%

9.2%

9.0%

8.8%

8.7%

8.7%

8.5%

8.4%

8.3%

8.6% 8.2% 8.0%

8.0%

7.6%

7.5%

Tenants in the Market

13 6,200,000 43 9,250,000

50,000-100,000 SF

100,000 sf - 500,000 SF 500,000 SF +

104 47,413,000

There are currently over 150 tenants in the NJ market seeking approximately 62.8 million sf of industrial space 50,000 sf or greater.

NORTHERN & CENTRAL NEW JERSEY MARKET STATISTICS 3Q 2013

Total SF NJ Overall COUNTIES Middlesex Bergen Hudson Essex Union Passaic Morris Mercer Somerset Hunterdon Warren Sussex Orange, NY Rockland, NY SUBMARKETS Port Exit 10/12 Meadowlands Eastern Morris Route 80 Corridor Exit 8A Exit 7A

Total Vacant Total Vacant Available SF Avail %

662,132,155

50,474,600

7.6%

173,513,495 85,828,568 82,758,421 63,566,877 59,212,453 50,224,925 39,242,609 29,298,629 27,326,534 6,196,165 6,094,373 2,014,511 23,927,170 12,927,425

11,771,095 6,221,227 7,393,493 3,358,192 4,884,606 2,872,943 3,590,671 3,103,077 1,579,536 1,741,788 912,327 278,383 1,848,678 918,584

118,905,469 80,180,866 75,573,397 17,907,325 14,194,622 57,930,815 11,884,074

9,441,704 4,069,497 5,713,079 1,963,134 1,247,398 3,796,165 1,108,952

Total Net Absorption

3Q 2013

2Q 2013

1Q 2013

4Q 2012

3Q 2012

2Q 2012

1Q 2012

4Q 2011

3Q 2011

2Q 2011

1Q 2011

4Q 2010

3Q 2010

7.0% 2Q 2010

3Q leasing activity registered an impressive 4,757,438 sf and net absorption registered a positive 3,482,879 sf, indicating that the Northern New Jersey Industrial market will continue to perform well for the remainder of 2013 and in 2014. The overall average asking rental rate, currently $4.87 psf NNN, continued to remain stable; while flex rental rates, currently $11.47 psf increased by $0.36.

Historical Vacancy Rates 9.5%

1Q 2010

During 2013, the New Jersey Industrial market showed signs of improvement demonstrated by an increase in sales volume, leasing activity for big box users and positive net absorption. Year-to-date sales volume, currently $948,120,781 is already 8.9% higher than 2012 totals and historically the highest in over five years. Vacancy rates have been steadily decreasing since 2010, currently 7.6%, a 1% drop since year-end 2012.

Leasing Activity

SF Under Const

Total Average Rate (NNN)

3,282,214

4,959,513

3,348,448 $

4.97

6.8% 7.2% 8.9% 5.3% 8.2% 5.7% 9.1% 10.6% 5.8% 28.1% 15.0% 13.8% 7.7% 7.1%

1,503,982 6,692 292,673 304,517 125,544 745,382 56,413 220,127 89,683 46,250 68,695 22,921 (191,043) (9,622)

1,709,801 848,477 403,311 118,037 75,249 225,921 46,796 1,276,076 40,509 11,261 0 2,000 169,808 32,267

1,253,100 0 878,564 352,000 277,244 0 87,540 0 0 0 0 0 500,000 0

$ $ $ $ $ $ $ $ $ $ $ $ $ $

4.66 6.54 5.87 5.30 4.89 4.85 5.67 3.55 4.50 3.43 4.17 5.04 4.43 6.75

7.9% 5.1% 7.6% 11.0% 8.8% 7.0% 9.3%

85,359 1,447,598 537,999 132,780 (9,897) 17,868 (18,019)

324,371 900,809 510,230 24,934 21,862 637,837 1,245,955

1,507,808 803,100 0 0 87,540 450,000 0

$ $ $ $ $ $ $

5.35 5.21 6.13 5.76 5.05 5.25 4.17

Source: Costar 2013 - All statistics are based on industrial facilities 20,000+ sf

Counties in Northern & Central NJ include: Bergen, Essex, Hudson, Hunterdon, Passaic, Mercer, Middlesex, Morris, Somerset, Sussex, Union & Warren. NAI Hanson also covers Orange and Rockland County NY

3Q Industrial Market Overview

Leasing Activity As of October 2013, leasing activity in Northern and Central New Jersey totaled 20,251,267 sf, which included two large blocks of pre-leased space absorbed in the Ports submarket by Imperial Bag & Paper Co. and Peapod leasing 395,000 sf and 345,000 sf respectively at the Prologis Ports site in Jersey City. Also in Jersey City, Graze Inc. took 111,963 sf at 25 Colony Road. Duro Bag Manufacturing Co. signed a 70,000 sf lease at 1000 Jefferson Road in Elizabeth Carteret while Salson Logistics leased 260,000 sf at 481 Doremus Avenue in Newark. At 55 Webro Road in Clifton, PSE&G leased 93,250 sf, Global Logistics & Distribution LLC leased 100,000 sf at 100 Middlesex Avenue in Carteret, RPM took 176,170 sf at 1500 Rahway Avenue in Avenel and Cal-Cartage took 359,965 sf at 50 Middlesex Avenue in Carteret.

Northern & Central New Jersey Northern & Central New Jersey Historical Leasing Activity 45,000,000 40,000,000 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0

35,121,715

39,381,773

36,921,768

20,251,267

2010

In the Meadowlands submarket there were two large deals during the 3Q. Macy’s leased 107,160 sf at 800 Central Boulevard in Carlstadt and 4 Wall Entertainment leased 106,841 sf at 35 State Street in Moonachie. The Exit 10-12 submarket had quite a bit of activity with Fedex leasing 232,000 sf at 200 Milik Street in Cateret, Ashland, Inc., leasing 198,440 sf at the New Jersey Center of Excellence in Bridgewater while IDEA Nuova leased 120,000 sf at 4 Corporate Place South in Piscataway. Federal Business Centers leased 110,959 sf at 300 Mac Lane in Perth Amboy and Ring Container took 109,842 sf at 50-52 Fadem Road in Springfield.

2,011

2,012

YTD 2013

100 Middlesex Avenue

481 Doremus Avenue

In the 8A submarket, significant large blocks of industrial space were absorbed by Williams Sonoma, who leased 750,000 sf at 101 Middlesex Center Boulevard in South Brunswick, Amazon.com who is taking 565,405 sf at 301 Blair Road in Avenel in a BTS transaction with KTR and Tory Burch who leased 526,400 sf at 115 Interstate Boulevard in South Brunswick. In addition, Home Depot took 413,060 sf at 130 Interstate Boulevard in South Brunswick, Wicked Fashions took 204,369 sf at 215 Middlesex Avenue in Monroe. South River Road in Cranbury had several notable leases with Amware leasing 150,000 sf at 1248 South River Road, Moroccan 400 Cabot Drive Oil leasing 105,515 sf at 1265 South River Road and a 143,060 sf lease by Monarch Electric at 1250 South River Road. In the central submarket Exit 7A, NAI Hanson represented Dynamic Marketing in a 396,510 sf lease at 400 Cabot Drive in Hamilton and SS Activewear took 296,577 sf at 16 Applegate Drive in Robbinsville. Also in Robbinsville, DeLonghi America took 167,152 sf at 141 West Manor Way.

3Q Industrial Market Overview

Lease Transactions - ytd

Northern & Central New Jersey

TENANT Volkswagon Williams Sonoma Amazon Tory Burch Home Depot Dot Com Distribution

ADDRESS 47 Station Road 101 Middlesex Center Boulevard 301 Blair Road 115 Interstate Boulevard 130 Interstate Boulvard 200 Liberty Way

CITY Cranbury South Brunswick Avenel South Brunswick South Brunswick Cranbury

Dynamic Marketing

400 Cabot Drive

Hamilton

396,510

Macy's Kuehne and Nagel Cal-Cartage Ceva Logistics Kenco Howard Berger SS Activewear Salson Logistics Cooper Lighting Fedex Wicked Fashions Ashland Chemical, Inc.

3001 Woodbridge Avenue 324 Half Acre Road 50 Middlesex Avenue 26 Englehard Drive 1 Costco Way 324 Half Acre Road 16 Applegate Drive 481 Doremus Avenue 1 Matrix Drive 200 Milik Street 215 Middlesex Avenue 1041 Route 202/206

Edison Cranbury Carteret Monroe Monroe Cranbury Robbinsville Newark Monroe Carteret Monroe Bridgewater

393,025 384,170 359,965 324,540 305,000 296,577 296,058 260,000 259,369 232,000 204,369 198,440

LMD Integrated Logistics Services

1 Nixon Lane

Edison

192,000

RPM

1500 Rahway Avenue

Avenel

176,170

DeLonghi America

141 West Manor Road

Robbinsville

167,152

Uncommon Carrier

700 Bartley Chester Road

Flanders

157,822

Amware Monarch Electric

1248 South River Road 1250 S. River Roaed

Cranbury Cranbury

150,000 143,060

Syncreon

45 Stults Road

South Brunswick

140,884

US Display

100 Electric Avenue

Secaucus

125,366

River Terminal Logistics

78 John Miller Way

Kearny

123,000

IDEA Nuova

4 Corporate Place South

Piscataway

120,000

Graze Inc.

25 Colony Road

Jersey City

111,963

Federal Business Centers

300 Mac Lane

Keasbey

110,959

Ring Container

50-52 Fadem Road

Springfield

109,842

Melissa & Doug LLC

8 Santa Fe Way

Cranbury

108,105

BMW 4 Wall Entertainment

490 Huyler Street 35 State Street

South Hackensack Moonachie

108,000 106,841

Moroccan Oil

1265 S. River Road

Cranbury

105,515

Global Logistics & Distribution

100 Middlesex Avenue

Carteret

100,000

Mobis Parts America

18 Thatcher Road

South Bound Brook

Premier Motor Lines

2 Colony Road

Jersey City

97,453

Superior Packaging Alpi

2 Bailey Farm Road 9 Brick Plant Road

Harriman, NY South River

94,211 94,000

PSE&G

55 Webro Road

Clifton

93,250

Spectra Labs

Rockleigh Corporate Center

Rockleigh

84,000

Northern Building Products

599 Gotham Parkway

Carlstadt

81,500

Quaker Sales And Distribution Duro Bag Manufacturing Co. Open Road Audi First Transit McGinley Transportation Graphcorr Global Express Logistics

20-40 Harry Shupe Boulevard 1000 Jefferson Avenue 2600 71st Street 100B Main Avenue 1000 Jefferson Avenue 4 Corn Road 3 Slater Drive

Wharton Elizabeth North Bergen Elmwood Park Elizabeth Dayton Elizabeth

77,000 70,000 61,000 57,760 52,000 50,630 50,000

Linden

50,000

AEX Group 2401 E. Linden Avenue Deals in red were represented by NAI Hanson

SF 928,000 750,000 565,405 526,400 413,060 443,421

98,265

3Q Industrial Market Overview

Sales Activity

Northern & Central New Jersey

Over the last ten months a total of 278 properties traded totaling 14,204,569 sf with a total sales volume of $948,120,781. The average price per square foot ranged between $57.00 and $70.00 psf. Cap rates averaged 7.46%, compared to the 12 months of last year when they averaged 6.59%. This strong activity has resulted in the increase in prices and the reduced supply of viable industrial buildings in Northern & Central New Jersey. One of the largest transactions that has occurred within the last year in the Northern New Jersey market is the sale of One Barnes & Noble Way in Monroe Township. This 1,145,200 sf industrial building sold for $83,000,000, or $72.48 psf, to Center Point Properties. The entire 684-acre International Trade Center industrial portfolio was sold for $59,000,000 to Exeter Property Group. The portfolio contains over 1.2 million square feet of industrial and flex space and three development sites. 413 acres of the site have been rezoned for development.

Average Price PSF vs. Cap Rate 12.0%

$85.00

11.0%

$75.00

10.0%

$65.00

9.0%

Within the Meadowlands submarket, TIAA-CREF purchased the Mohawk Distribution Center located at 698 Route 46 in Teterboro from RREEF America, LLC for $81,000,000 or $131.28 psf. In July, 275 Hartz Way located in Secaucus was purchased by Equinix, Inc. from ING Clarion for $74,000,000 or $183.00 psf. This 403,869 sf flex/data center facility also contains 65,000 sf of retail space and traded in 2005 for $52,000,000.

$55.00

8.0%

$45.00

7.0%

$35.00

6.0%

$25.00

5.0%

In August, Dividend Capital Total Realty acquired 100 Burma Road in Jersey City for $13,500,000 or $89.00 psf from 100 Burma Road, LP. The FedEx Terminal located at 550 Delancy Street in Newark was purchased by Terreno Realty Corporation. Ironbound Transport Park sold this 52,000 sf property for $15,000,000 or $288.00 psf at a 5.6% cap rate and represents the highest per square foot transaction this year.

$1,000,000,000 $900,000,000 $800,000,000 $700,000,000 $600,000,000 $500,000,000 $400,000,000 $300,000,000 $200,000,000 $100,000,000 $0

Average Price PSF Average Cap Rate

1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q 2013 2Q 2013 3Q 2013 YTD

$95.00

Historical Sales Volume

Along the 8A Corridor Bentall Kennedy (US) LP purchased 258 Prospect Plains Road, a 886,875 sf building, from Exeter Property Group for $110.50 psf. There are a few pending sales transactions. Brookfield Office Properties is under contract to acquire both 1065 Cranbury South River Road and Middlesex Center (Building 3) both located in Monroe Township from IDI. Both of these warehouse facilities are part of a 75 property portfolio sale and are trading for $22,600,000 and $21,100,000 or $47.00 psf respectively. This transaction is part of Brookfield's acquisition of IDI.

$870,995,762

$948,120,781

$738,521,019

$553,841,961

2010

2011

2012

YTD 2013

Source: Costar, 20,000 sf +, Excludes Bulk Portfolio Sales

2 Emerson Lane

Also in Monroe Township, Liberty Property Trust has three buildings under contract owned by Cabot Properties that are a part of a 104 property portfolio sale. The Staples 204,369 sf warehouse located at 21 S Middlesex Avenue will trade for $12,800,000, the 204,404 sf Tyler Distribution Center located at 4 S Middlesex Avenue will trade for $12,800,000 and the Wicked Fashions facility, 418,213 sf, will trade for $26,100,000. These properties sold in October of 2009 and are all averaging $63.00 psf.

3Q Industrial Market Overview

SalesTransactions - ytd ADDRESS 556 Morris Avenue 4371 County Line Road (19 Properties) 90 Dayton Ave (8 Properties) 450 Clark Drive ITC (11 Properties) 1 Barnes & Noble Way 1041 Route 202/206 (16 Properties) 16 Applegate Drive 301 Blair Road (2 Properties) 311-315 Half Acre Road (2 Properties) 1011 Morris Ave (16 Properties) 258 Prospect Plains Rd 698 Route 46 2520 Route 130 50 Dey Street 275 Hartz Way 200 Middlesex Avenue 180 Baldwin Avenue 200 Riser Road 2 Emerson Lane 400 Clermont Terrace 20 River Road (3 Properties) 2615 US Highway 130 570 South Avenue E. 40-44 Talmadge Road 700 Blair Road One Gannett Drive 261 River Road 742 Old Post Road 11 Commerce Ct W 301 Island Road 5 Henderson Dr 301 Mayhill St 321 Valley Road 17 Blanchard Street 125 North Street 299 Jefferson Road 100 Burma Road 461 Ridge Road 1 BMW Plaza 75 Mill Street 288 Main Street 100 Bomont Pl 26 Brick Yard Road

Northern & Central New Jersey

BUYER Merck Sharp & Dohme Corporation Quad/Graphics, Inc. Mynt Properties, LLC Exeter Property Group CenterPoint Properties Advance Realty McKesson KTR Capital Partners LP Duke Realty Corporation Merck & Co Inc. Bentall Kennedy (US) LP TIAA-CREF GRM Information Management Services GRM Information Management Services Equinix, Inc. The Hampshire Companies 180 Baldwin Avenue, LLC Sitex Group Carlyle Investment Management, LLC EnviroFinance Group, LLC DVL Incorporated James Campbell Company LLC Trade Linker International Romark Management LLC The Hampshire Companies Lifetime Fitness Industrial Income Trust, Inc. Glendale Warehouse Company Levin Commerce, LLC Island SG LLC The Hampshire Companies The Hampshire Companies Valley Holdings LLC 60 Lockwood Assocs LLC Forsgate Industrial Partners Cole Corp Income Trust Industrial Income Trust, Inc. BMB Properties & Management LLC Lifetime Fitness Darlington Heritage Properties Oger Holdings LLC Conca D'Oro Imports Rahway Steel Drum Company JD Commercial & Industrial Pro/2301 Atlantic Avenue LLC Bloomfield Belleville Assocs LLC Restaurant Depot LLC. Fem International Home Dynamics Terreno Realty Corporation 750 Realty LLC Siskind Group Filo Factory Amtec International 50 Lackawanna LLC

2301 Atlantic Avenue

Manasquan

117,648

225 Belleville Avenue 1760 New Durham Rd 81 International Drive 433 Murray Hill Parkway 1 Dodge Drive 750 Frelinghuysen Avenue 100 Springfield Avenue 10 Fairway Court 720 Dowd Ave 50 Lackawanna Ave

Bloomfield South Plainfield Mount Olive East Rutherford West Caldwell Newark Piscataway Northvale Elizabeth Parsippany

110,000 106,270 100,000 100,000 93,000 90,186 86,000 85,411 80,000 79,750

Arrow Pack Inc

85 Twin Rivers Dr

East Windsor

Deals in red were represented by NAI James E. Hanson

CITY Summit Various Passaic Mount Olive Monroe Township Bridgewater Robbinsville Avenel Cranbury Union Cranbury Teterboro Cranbury Jersey City Secaucus Carteret Jersey City Little Ferry Secaucus Union Bogota Cranbury Cranford Edison Carteret Harrison,NY Clifton Edison Cranbury Mahwah West Caldwell Saddle Brook Hillsborough Newark Teterboro Parsippany Jersey City Monmouth Junction Montvale Newton Paterson Totowa Cranbury

SF 2,000,000 1,667,804 1,639,996 1,200,000 1,145,200 1,092,670 1,001,880 957,055 949,580 943,418 886,875 616,992 509,775 409,648 403,869 400,000 330,000 286,628 283,215 275,000 263,000 262,939 259,670 243,000 234,325 232,000 230,953 228,850 225,590 212,940 210,530 200,600 200,000 200,000 157,200 150,500 150,000 146,750 130,000 129,000 126,872 119,384 119,014

76,800

3Q Industrial Market Overview

Construction Activity

Northern & Central New Jersey

During 2013, three new industrial facilities were built totaling nearly 1.2 million sf. In South Brunswick along Exit 8A, Middlesex Center II, a 750,000 sf warehouse facility was delivered and will be occupied by Williams Sonoma. In June, Mountain Development Corp. built a 167,752 sf warehouse facility at 2 Peekay Drive in Clifton and subsequently sold it to the California Public Employee Retirement System and GI Partners, a private equity firm. The Hampshire Companies built a 232,000 sf warehouse facility at 200 Milik Street in Carteret along the Exit 10 Corridor that has been leased by FedEx Ground. At 275 Omar Avenue in Avenel, a 391,650 sf facility purchased by KTR Capital, offers 111,950 sf of cooler space with 36-40' ceilings. Currently there are 13 properties under construction, totaling 6,760,865 sf. The largest project underway is the Prologis Ports site located in Jersey City totaling 878,564 sf. This property is scheduled for a January 2014 delivery date. On Mill Road in Edison, Middlesex Logistics Center, totaling 571,100 sf, is underway and represents the largest spec construction distribution facility north of Exit 8A and will be delivered in December of this year. Other significant projects include a 352,000 sf facility that will be constructed by November 2013 at 60 Lister Avenue in Newark by The Morris Companies and Clarion Partners is building a 277,244 sf facility at Elizabeth Logistics Center on Dowd Avenue in Carteret. Due to high demand from big box users, an increase in construction along the Tunrpike Corridor from Exit 7A to the George Washington Bridge is anticipated.

Elizabeth Logistics Center Elizabeth, NJ - 277,244 SF 32' Ceilings/45 Loading Docks

Middlesex Center III South Brunswick, NJ - 450,000 SF 36' Ceilings /104 Loading Docks

Prologis Ports Jersey City, NJ - 878,564 SF 36' Ceilings/150 Loading Docks

60 Lister Avenue Newark - 352,000 SF 36' Ceilings/40 Loading Docks

Mill Road Middlesex Logistics Center - 571,100 SF 36' Ceilings /108 Loading Docks

275 Omar Avenue Avenel, NJ - 391,650 SF 36'-40' Ceilings/78 Loading Docks

3Q Industrial Market Overview

Meadowlands

‚‚

10.1%

11.0%

9.8%

10.0%

8.9%

8.7%

8.8%

8.8%

1Q 2013

4Q 2012

3Q 2012

2Q 2012

1Q 2012

4Q 2011

3Q 2011

2Q 2011

1Q 2011

7.7%

7.3%

7.6%

3Q 2013

10.3%

2Q 2013

10.0%

4Q 2010

‚‚

9.3%

3Q 2010

‚‚

9.3%

2Q 2010

‚‚

The Meadowlands submarket consists of 864 industrial facilities Historical Vacancy Rates vs. Asking Rental Rates 12.0% $7.00 totaling 75,573,397 sf and ranks third in size in the State. $6.00 10.0% Overall vacancy rates declined 1.2% since 3Q 2012, dropping $5.00 8.0% $4.00 from 8.8% to 7.6%, currently. 6.0% $3.00 4.0% 3Q leasing activity totaled 510,230 sf, and represents 11% of all $2.00 2.0% $1.00 leases completed in Northern New Jersey. 0.0% $0.00 This submarket demands the highest average asking rental rates due to its proximity to New York City, currently $6.13 psf NNN The new projects underway within the Meadowlands region are the American Dream and Teterboro Landing. When complete, the American Dream, formerly known as Xanadu, will be one of the largest and most unique shopping, entertainment and tourism centers in the world. The project is currently 80% complete. The ownership, Triple Five, are making changes to the exterior to improve aesthetics and to the interior to improve retail attraction and retention. Triple Five is also planning to add new world class interactive components including, an amusement park, ice rink and water park. Teterboro Landing, the former Honeywell 55 acre site purchased by Catellus, will be developed into a mixed use project that will include a 151,500 sf light industrial building and 428,000 sf of retail space. Walmart and Costco are have been mentioned as potential anchor stores. 1Q 2010

‚‚

Northern & Central New Jersey

Larger tenants occupying space include: Tenant Size Address Fashion Logistics 125,000 sf 333 North Street, Teterboro Macy's 107,160 sf 800 Central Boulevard, Carlstadt 4 Wall Entertainment 106,841 sf 35 State Street, Moonachie Open Road Audi 61,000 sf 2600 71st Street, North Bergen Highroad Press 38,230 sf 220-240 Anderson Avenue, Moonachie Creative Laminates 34,229 sf 179 Commerce Road, Carlstadt Kessem Foods 33,000 sf 50 Amor Avenue, Carlstadt Distribution International 28,928 sf 343 Murray Hill Parkway, East Rutherford Bashion Rug 28,914 sf 65 Railroad Avenue, Ridgefield Significant trades include: Address 698 Route 46, Teterboro 275 Hartz Way, Secaucus 200 Riser Road, Little Ferry 2 Emerson Lane, Secaucus 125 North Street, Teterboro 433 Murray Hill Pkwy, E. Rutherford 2001 42nd Street, North Bergen

Size 616,992 sf 403,869 sf 286,628 sf 283,215 sf 157,200 sf 100,000 sf 80,000 sf

Price $81,000,000 $74,000,000 $32,250,000 $18,400,000 $12,849,000 $ 6,850,000 $ 2,350,000

Rending of Teterboro Landing

Buyer Seller TIAA-CREF RREEF America LLC Equinix, Inc. ING Clarion Sitex Mack-Cali Corp. CoreSite Realty Grp Hartz Mountain Forsgate Ind. Partners Viad Corp. Home Dynamics Penn Bottle Co. Dumbo Moving & Storage Inc. 2001 Realty Corp.

Industrial Market Overview Central New Jersey

Route 80 Corridor ‚‚

‚‚ ‚‚ ‚‚ ‚‚ ‚‚

The Route 80 Corridor consists of 158 properties,14,194,622 sf of industrial inventory and is the second smallest submarket in the Northern and Central New Jersey market. Vacancy rates decreased by 1.1% since 3Q 2012, currently 8.8% and will continue to decline throughout the year. This submarket boasts a 91.2% occupancy rate. 3Q leasing activity totaled 21,862 sf and net absorption registered a negative 9,897 sf. Average asking rental rates increased $.25 since 3Q 2012, currently $5.05 100 Bomont Place psf NNN. There are currently two properties under construction totaling 87,540 sf, however, there are seven proposed buildings totaling 458,127 sf in the pipeline for future construction

Larger tenants occupying space include: Tenant Quaker Sales Distribution Air Contract Transport Crofutt Smith

Size Address 77,000 sf 20-40 Harry Shupe Boulevard, Wharton 29,433 sf 1578 Sussex Turnpike, Randolph 27,746 sf 106 Iron Mountain Road, Mine Hill

Significant trades include: Address Size Price Buyer Int'l Trade Center, Mt. Olive 1,200,000 sf $58,800,000 Exeter Property Group (11 buildings) 301 Mayhill Street, Saddle Brook 200,000 sf $ 8,700,000 The Hampshire Cos. 288 Main Street, Paterson 126,872 sf $ 4,300,000 Oger Holdings LLC 100 Bomont Place, Totowa 119,384 sf $ 5,450,000 Conco D'Oro Imports

Historical Vacancy Rates vs. Asking Rental Rates $7.00

13.6%

$6.00

16.0% 13.0%

13.0%

12.3%

12.6%

$5.00

11.8% 10.2%

10.2%

14.0%

11.7%

10.6%

10.3%

9.8%

9.5%

$4.00

12.0% 9.0%

8.8%

10.0% 8.0%

$3.00

6.0%

$2.00

4.0%

2013 3Q

2Q 2013

1Q 2013

4Q 2012

3Q 2012

2Q 2012

1Q 2012

4Q 2011

3Q 2011

2Q 2011

1Q 2011

4Q 2010

3Q 2010

0.0% 2Q 2010

2.0%

$0.00 1Q 2010

$1.00

Seller JP Morgan Asset Mgmt JV 850 Clark Drive LLC Arrow Fastener Company Inc. Patham R/E Holdings Stack Realty Associates

Industrial Market Overview Central New Jersey

Eastern Morris ‚‚

The Eastern Morris Submarket consists of 235 properties and a total of 17,907,325 sf of industrial inventory.

‚‚

There is currently no new space under construction or proposed future projects within the small submarket due to its high vacancy rate and decrease in demand.

‚‚

Vacancy rates decreased by 1.0% since 3Q 2012 and are currently 11.0%.

‚‚

3Q leasing activity registered 24,934 sf.

‚‚

Average asking rental rates decreased by $0.30 since 3Q 2012 when they

50 Lackawanna Ave

were $6.06 psf NNN and currently registered $5.76 psf NNN. ‚‚

With no new construction planned and a continued economic recovery, vacancy rates are expected to decline further.

Larger tenants occupying space include: Tenant

Size Address

Corporate Essentials

22,241 sf

2 Cranbury Road, Parsippany

Zimmer

20,200 sf

181 East Halsey Road, Parsippany

Admiral Filter

15,000 sf

18-26 Green Pond Road, Rockaway

Feinblatt Luxe

9,388 sf

1 Mars Court, Montville

Significant trades include: Address

Size

Price

Buyer

Seller

5 Henderson Drive, W. Caldwell 210,530 sf

$14,100,000

The Hamphire Cos.

Eaton Vance Corp.

299 Jefferson Rd, Parsippany

150,500 sf

$32,400,000

Cole Corp Income Trust

Grosvenor JV Vision Equities LLC

50 Lackawanna Ave, Parsippany 79,750 sf

$ 5,901,500

50 Lackawanna LLC

Delav Realty

92 Green Pond Rd, Rockaway

74,206 sf

$ 4,081,330 Cibao Meat Products

GreenPond Road Assoc.

58-60 S. Jefferson Rd, Whippany

56,765 sf

$ 1,582,000

AeroFlex

1029 Edwards Road, Parsippany 26,581 sf

Tulfra Realty

$ 1,300,000 Javin Realty LLC

Historical Vacancy Rates vs. Asking Rental Rates $8.00

12.2%

$6.00

12.8% 11.3%

$7.00

11.4%

12.0%

11.8%

10.2% 9.0%

9.0%

8.7%

$5.00

8.6%

14.0% 11.1%

11.2%

11.0%

12.0% 10.0%

8.7%

8.0%

$4.00

6.0%

$3.00

3Q 2013

2Q 2013

1Q 2013

4Q 2012

3Q 2012

2Q 2012

1Q 2012

4Q 2011

3Q 2011

2Q 2011

1Q 2011

4Q 2010

0.0% 3Q 2010

2.0%

$0.00 2Q 2010

4.0%

$1.00 1Q 2010

$2.00

Wesco Real Estate

Industrial Market Overview Northern New Jersey

Ports ‚‚ ‚‚

‚‚ ‚‚ ‚‚

The Port Region consists of 1,283 properties and is the largest submarket in New Jersey with a total of 118,905,469 sf. There is currently 1.5 million square feet of industrial space under construction depicting high demand for warehouse distribution facilities within the Port Region. Vacancy rates increased slightly by 0.2% since 3Q 2012, currently registering 7.9%. Net absorption was 85,359 sf and leasing activity totaled 1,507,808 sf and will continue to remain strong throughout the year. Average asking rental rates remained stable at $5.35 psf NNN

Larger tenants occupying space include: Tenant RTL Sevices Graze, Inc. Premier Motor Lines Duro Bag Manufacturing McGinley Transportation AEX Group Global Express Logistics AZAP

Size Address 123,000 sf 78 John Miller Way, Kearny 111,000 sf 25 Colony Road, Jersey City 97,543 sf 2 Colony Road, Jersey City 70,000 sf 1000 Jefferson Avenue, Elizabeth 52,000 sf 1000 Jefferson Avenue, Elizabeth 50,000 sf 2401 E. Linden Avenue, Linden 50,000 sf 3 Slater Drive, Elizabeth 48,800 sf 798 Frelinghuysen Avenue, Newark

Significant trades include: Address Size Price 50 Dey Street, Jersey City 409,648 sf $19,700,000 550 Delancey Street, Newark 52,000 sf $15,000,000 100 Burma Road, Jersey City 151,397 sf $13,500,000 180 Baldwin Ave, Jersey City 300,000 sf $ 4,500,000 1831 Burnet Ave, Union 84,000 sf $ 4,335,000 17 Blanchard Street, Newark 200,000 sf $ 3,014,000 151 W 7th Street, Bayonne 47,700 sf $ 2,700,000

Buyer GRM Info. Mgmt Svc Terrano Realty Corporation Dividend Capital TTL Realty 180 Baldwin Ave LLC Miller Industrial Prop. 60 Lockwood Assoc. West 7th St. LLC

Historical Vacancy Rates vs. Asking Rental Rates $6.00 7.6%

$4.00 $3.00

7.1%

7.2%

7.2%

7.2%

7.2%

7.3%

7.6%

7.6%

4Q 2012

7.9%

3Q 2012

$5.00

8.0%

7.9%

7.3%

7.1%

7.0%

$2.00 $1.00 3Q 2013

2Q 2013

1Q 2013

2Q 2012

1Q 2012

4Q 2011

3Q 2011

2Q 2011

1Q 2011

4Q 2010

3Q 2010

2Q 2010

1Q 2010

$0.00

8.2% 8.0% 7.8% 7.6% 7.4% 7.2% 7.0% 6.8% 6.6% 6.4%

Seller Forkosh Dev. Grp Ironbound Transport Pk 100 Burma Road LP Argent Ventures JV Lehman Bros Holdings Burnet, LLC The Newark Group Ideal Window Mfg. Inc.

Industrial Market Overview Central New Jersey

Exit 10/12 ‚‚ ‚‚ ‚‚ ‚‚ ‚‚

The Exit 10/12 corridor consists of 791 properties totaling 80,180,866 sf and is the second largest industrial submarket in New Jersey. With only 4.0 million sf currently available, vacancy rates registered 5.1%, down 1.8% since 3Q 2012. This submarket experienced the second highest leasing activity during 3Q 2013, leasing 900,809 sf. Net absorption remained positive for the 3rd year in a row, currently 1,447,598 sf. Average asking rental rates rose from $4.43 NNN psf since 3Q 2012 to $5.21 NNN psf, currently, a $0.78 psf increase.

Larger tenants occupying space include: Tenant Midwest Air Tech Macy's Cal-Cartage FedEx SeaJet Ashland Inc. RPM All Seasons Foods IDEA Nuova Federal Business Centers Global Logistics & Distribution Ring Container Ace World Class

Size Address 369,361 sf 1 Truman Drive, Edison 393,025 sf 3001 Woodbridge Ave, Edison 359,965 sf 50 Middlesex Avenue, Carteret 232,058 sf 200 Milik Street, Carteret 200,054 sf 23 Mack Drive, Edison 198,440 sf 1041 Route 202/206, Bridgewater 176,158 sf 1500 Rahway Avenue, Avenel 164,758 sf 8 Corporate Place, Piscataway 120,000 sf 4 Corporate Place, Piscataway 110,959 sf 300 Mac Lane, Perth Amboy 100,000 sf 100 Middlesex Avenue, Carteret 109,842 sf 50-52 Fadem Road, Springfield 97,462 sf 70-80 Distribution Boulevard, Edison

Significant trades include: Address Size Price Buyer 301 Blair Road, Avenel 957,055 sf $48,000,000 KTR Capital Partners 200 Middlesex Ave, Carteret 400,000 sf $17,000,000 The Hampshire Companies 742 Old Post Road, Edison 228,850 sf $13,265,000 Glendale Warehouse Co. 40-44 Talmadge Road, Edison 243,000 sf $10,000,000 Romark Logistics 700 Blair Road, Carteret 234,325 sf $13,500,000 The Hampshire Companies Historical Vacancy Rates vs. Asking Rental Rates $6.00 $5.00

8.3%

8.6%

8.6% 7.7%

7.2%

$4.00

6.8% 5.8%

5.6%

6.8%

6.9%

7.4% 6.3%

6.0%

5.6%

5.1%

$3.00 $2.00 $1.00 3Q 2013

2Q 2013

1Q 2013

4Q 2012

3Q 2012

2Q 2012

1Q 2012

4Q 2011

3Q 2011

2Q 2011

1Q 2011

4Q 2010

3Q 2010

2Q 2010

1Q 2010

$-

10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%

Seller C&S Whsle Grocers AMB Cohen Asset Mgmt Sitex Realty Greenfield Partners LLC Prism Capital Partners

Industrial Market Overview Central New Jersey

Exit 8A

Historical Vacancy Rates vs. Asking Rental Rates ‚‚ The Exit 8A submarket consists of 259 properties totaling 57,930,815 sf $6.00 14.0% ‚‚ With a 93% occupancy rate, this submarket boasts one of the lowest 12.0% $5.00 10.0% vacancy rates, currently 7.0%, up .4% versus 3Q 2012. $4.00 8.0% $3.00 ‚‚ 3Q leasing activity registered 637,837 sf and net absorption remained 6.0% $2.00 4.0% positive for the fifth consecutive year, totaling 450,000 sf. $1.00 2.0% 0.0% ‚‚ Average asking rental rates within this submarket increased $0.38 psf since $0.00 3Q 2012, now $5.25 psf NNN. ‚‚ Warehouse rental rates, currently $4.02 psf slightly increased from $3.60 psf from 3Q in 2012. ‚‚ Middlesex Center III, a 450,000 sf building on Middlesex Boulevard in South Brunswick is the only building currently under construction, however there are 24 buildings totaling nearly 14.9 million square feet that are proposed for future construction. 12.0%

10.7%

10.4%

11.1%

12.0%

11.1%

9.4%

4Q 2012

7.0%

7.2%

2Q 2013

6.5%

6.6%

YTD 2013

6.4%

1Q 2013

6.2%

3Q 2012

1Q 2012

4Q 2011

3Q 2011

2Q 2011

1Q 2011

4Q 2010

3Q 2010

2Q 2010

1Q 2010

6.8%

2Q 2012

8.0%

Large tenants occupying space during the last three quarters include: Tenant Williams Sonoma Tory Burch Home Depot Wicked Fashion Amware Monarch Electric Moroccan Oil Melissa & Doug Mobis (renewal)

Size Address 750,000 sf Middlesex Center II, South Brunswick 526,400 sf 115 Interstate Boulevard, South Brunswick 413,060 sf 130 Interstate Boulevard, South Brunswick 204,369 sf 215 Middlesex Avenue, Monroe 150,000 sf 1248 South River Road, Cranbury 143,060 sf 1250 South River Road, Cranbury 105,515 sf 1265 Cranbury S. River Road, Cranbury 108,105 sf 8 Santa Fe Way, Cranbury 98,265 sf 18 Thatcher Road, South Brunswick

Significant trades include: Address Size Price Buyer 258 Prospect Plains Road 886,875 sf $98,800,000 Bentall Kennedy LP 1 Barnes & Noble Way, Monroe Twp 1,145,200 sf $83,000,000 CenterPoint Prop. 315 Half Acre Rd, Cranbury (2 Prop) 949,580 sf $75,300,000 Duke Realty Corp. 11 Commerce Ct. W 225,590 sf $19,626,330 Levin Commerce LLC 2615 US Hwy 130, Cranbury 262,939 sf $14,475,000 James Campbell Co.

Seller Exeter Property Group CBRE Global Investors Deka Immobilien JV Rockefeller Group Seagis Property Group LP Bailard Gateway LLC

322 Half Acre Road, Cranbury 461 Ridge Road, Cranbury 50 S. Middlesex Avenue, Monroe 26 Brick Yard Road, Cranbury

BlackRock Realty GE Capital Sanchez Cano Cranbury Prop. Holdings

160,447 sf 146,750 sf 146,529 sf 119,014 sf

$ $ $ $

6,100,000 4,842,750 7,033,392 4,900,000

A&M Industrial Supply BMB Properties Mgmt Matrix Development Rahway Steel Drum

Industrial Market Overview Central New Jersey

Exit 7A ‚‚ ‚‚ ‚‚ ‚‚ ‚‚ ‚‚ ‚‚ ‚‚

The Exit 7A submarket consists of 69 properties totaling 11,884,074 sf. Vacancy rates significantly dropped by 8.9% since 3Q 2012, when vacancy rates registered 18.2%. Currently with only 1.1 million square feet available, vacancy rates registered 9.3%. Average asking rental rates along this Corridor continue to increase, now $4.17 psf NNN. Leasing activity registered 1,245,955 sf for the 3Q of the year and is set to outpace 2012 totals. One of the largest lease transactions in 3Q occurred when Dynamic Marketing leased 396,510 sf at 400 Cabot Drive in Hamilton, NJ. NAI Hanson represented the tenant in this transaction. 3Q net absorption registered a negative 18,019 sf. Currently, there are seven proposed facilities along this corridor totaling almost 2 million square feet with strong build-to-suit development activity. Due to high demand for big box users, we anticipate an increase in construction activity along the Exit 7A Corridor.

Future Market Activity: ‚‚ In Robbinsville, Matrix sold a parcel within the Park to an affiliate of KTR Capital Partners for the development of a 1 million sf warehouse for Amazon which is on track to open in 2014 and will reportedly bring 600 full-time jobs and more than $22 million in tax revenue to the Township, school district and Mercer County. ‚‚

Matrix Development Group is putting up a distribution facility at its business park at Exit 7A for McKesson Corp., a pharmaceutical distributor. The new 350,000 sf facility has been approved for a future expansion to 450,000 sf. The building is one of several new build-to-suit developments within Matrix Business Park.

Larger tenants occupying space include: Size Address 396,510 sf 400 Cabot Drive, Hamilton 167,152 sf 141 West Manor Road, Robbinsville 296,058 sf 16 Applegate Drive, Robbinsville 400 Cabot Drive

Historical Vacancy Rates vs. Asking Rental Rates 37.8%

37.8%

42.5%

37.9% 34.5%

37.5%

34.5% 29.6%

32.5%

28.3% 25.7% 25.8%

18.1% 18.6%

22.5% 17.3%

16.2%

17.5% 10.4%

12.5%

2Q 2013

YTD 2013

1Q 2013

4Q 2012

3Q 2012

2Q 2012

1Q 2012

4Q 2011

3Q 2011

2Q 2011

1Q 2011

4Q 2010

7.5% 3Q 2010

Rental Rates

27.5%

17.5%

2Q 2010

$5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00

1Q 2010

Tenant Dynamic Marketing Inc. DeLonghi America SS Activewear

Vacancy Rates

3Q Industrial Market Overview

Our Industrial Team

Barry J. Cohorsky Jeffrey W. DeMagistris Dominic M. Fittizzi

Steven G. Leitner

Andrew Somple

Patrick Lennon

Kenneth D. Lundberg

Christopher D. Todd Russell J. Verducci

Northern & Central New Jersey

Nicholas Herrick

Gregory James

Steve Pastor

Scott K. Perkins

Thomas A. Vetter

Michael G. Walters

Walter Wolf

About NAI James E. Hanson • Nearly 60 years of experience in the New Jersey Industrial Market. • Largest independently owned commercial real estate firm in the State. • Through the affiliation with NAI Global, we are part of a managed network of 5,000 professionals in 400 offices in 55 countries throughout the world. • Represented over 12 million sf of industrial space over the last five years. • NAI James E. Hanson currently holds the most SIORs over any other Commercial Real Estate firm in New Jersey. • Two offices located in Parsippany and Hackensack with 38 real estate professionals.

235 Moore Street Hackensack, NJ 07601 201 488 5800 naihanson.com

William C. Hanson President

1140 Parsippany Blvd Parsippany, NJ 07054 973 463 1011