Real Estate Forum

570,000 square feet is under construction as a redevelopment project in Perth Amboy, with a flexible design.

New Jersey had quite a bit of small- and medium-size space available in modern industrial buildings, built before the economy went slack. Even with a big post-recession comeback at Turnpike Exit 8A, there is still almost 10% vacancy in the 66-million- square-foot submarket. Six to seven million square feet of that might be divisible for smaller users. Belfer says a number of start-up e-tailers, some very new—that is, created within the past six months—are looking in New Jersey at this time. Several health-and-beauty e-commerce businesses are also searching, he says.

Fab.com, founded in Manhattan, has
operated a warehouse in Keasbey for
more than a year. Fab bills itself as the
“world’s fastest-growing e-commerce site,”
having started in June 2011 with 175,000
account members and claiming 10 mil-
lion members by December 2012. This
kind of wildly unpredictable growth
means that e-tailers require “highly
expandable” space, Belfer notes. “These
companies come into the marketplace
looking for 25,000 square feet, expand-
able to 250,000 square feet.”
Nevertheless, e-tailers may have very
specific requirements in terms of the type
of space and building features they’re
seeking. “They want state-of-the-art, with
minimum 32-foot-clear ceilings, up to 36
feet and even 40 feet,” according to
Belfer. (State-of-the-art is generally con-
sidered to be 36 feet, to accommodate
e-tailers’ need for two or three mezzanine
levels that can be dedicated to specific
tasks such as gift-wrapping or handling
returns.) As Jones Lang LaSalle put it in
its recent “Big-Box Outlook,” e-business is
“disrupting physical space and site
requirements” all over the place. In
Northern New Jersey, for instance, bro-
kers say there is currently a serious short-
age of big boxes available with 250,000
square feet or more and high ceilings.

And because almost all e-businesses are labor-intensive operations, they require more parking than a typical industrial user. If a big e-tailer moves into an existing modern facility with truck-loading doors on both sides, it will probably only use the doors on one side of the building, and put employees’ cars on the other side, said JLL’s Kossar. If a company is developing its own facility, then it may need extra acreage for parking. Then again, if the e-tailer is

REAL ESTATE NJ...continued on page 72



 

$14,000,000

Multi-Family
Complex
Freehold, NJ
At Provident Bank, we make
loan decisions locally, so we can
process loans quicker and provide
customized lending solutions –
that’s commitment you can
count on.