This article discusses the resurgence of industrial development in Central and Southern New Jersey. Specifically, it notes there are over 7.8 million square feet of proposed or recently completed industrial projects from 2013 to 2015 by developers like Clarion Partners, Dermody Properties, and Prologis. This high level of development activity shows growing confidence in the New Jersey industrial market, driven by the state's strong logistics infrastructure and incentives like the Grow NJ tax credit program. The Central and Southern New Jersey industrial markets have become attractive locations for investment and development due to access to major consumer markets and transportation networks.

1. NEW JERSEY’S INDUSTRIAL RESURGENCE
Spec and build-to-suit industrial projects point to the rebound in confidence of
the Central and Southern New Jersey markets.
By Matthew Marshall
T
he industrial markets in Central
and Southern New Jersey are mak-
ing a comeback and attracting the
attention of both U.S. and foreign de-
velopers and owners alike. The state’s
strong logistics and distribution infra-
structure creates access to national and
international markets. There are more
than 130 million
consumers within
a day’s drive plus a
$3 trillion disposable
income market with
thousands of busi-
nesses. These statis-
tics are at the root of
the resurgence of the
Central and South-
ern New Jersey in-
dustrial market.
Although the
transportation, logis-
tics and distribution
industry (TLD) has
always comprised a
significant portion of
the state’s Real Gross
Domestic Product
(GDP), the numbers
are continuing to
rise, positioning the
New Jersey market
among the top indus-
trial markets in the
country. In 2013, the
TLD sector contrib-
uted more than $54.4
billion to New Jer-
sey’s GDP, the sixth
highest dollar amount nationwide. Ap-
proximately 364,756 workers are em-
ployed in the TLD sector in New Jersey,
which is about 11.3 percent of the state’s
private sector workers. Nationally, TLD
accounts for merely 8.8 percent of pri-
vate sector employment. New Jersey
represented more than 4 percent of the
nation’s GDP generated from TLD.
The Grow NJ Incentive
In addition to Central and Southern
New Jersey’s operating advantages, the
Grow NJ tax credit program will con-
tinue to play a large role in attracting
new employers to relocate or stay in the
This article originally appeared in Northeast Real Estate Business, June/July 2015. © 2015 France Media, Inc. www.
rebusinessonline.com
Address Rentable Building Area Landlord Status Tenants
Middlesex County
965 Cranbury S. River Rd., Monroe 550,050 SF Matrix Development Completed Dec. 2014 N/A
101 Middlesex Center Blvd., South Brunswick 750,000 SF IDI Gazeley Completed May 2013 William-Sonoma
301 Middlesex Center Blvd., South Brunswick 450,000 SF IDI Gazeley Completed March 2014 N/A
66 Station Rd, Cranbury 504,428 SF ProLogis Construction starts July 2015 N/A
11 Corn Rd, Dayton 308,276 SF Dermody Properties Delivering July 2015 N/A
117 Interstate Blvd., South Brunswick 593,720 SF ProLogis Delivering early 2016 N/A
2 Brick Yard Rd., Cranbury 992,043 SF Clarion Partners Construction starts June 2016 N/A
3 Brick Yard Rd., Cranbury 444,940 SF Clarion Partners Construction starts June 2016 N/A
Mercer County
1 Montgomery Way, Robbinsville 219,000 SF Matrix Development Completed Nov 2014 Falken Tire
3 Montgomery Way, Robbinsville 183,084 SF Matrix Development Completed Sept. 2014 Lay-Z-Boy
Burlington County
1000 John Galt Way, Burlington 406,375 SF Haines Center-Florence Completed Oct. 2014 Destination Maternity
2020 Route 130 N., Burlington 526,050 SF NFI Industries Completed June 2013 Subaru
2040 Route 130 N., Burlington 239,000 SF NFI Industries Completed Dec. 2014 Express Scripts
2 River Rd, Burlington 477,460 SF Clarion Partners Delivering Sept. 2015 N/A
3 River Rd, Burlington 173,333 SF Clarion Partners Delivering Sept. 2015 N/A
15 Campus Dr., Burlington 180,000 SF Exeter Property Group Delivering Aug. 2015 N/A
Gloucester County
2277 Center Square Rd., Swedesboro 202,908 SF Liberty Property Trust Completed Dec 2014 Amazon.com
200 Arlington Blvd., Swedesboro 302,400 SF Liberty Property Trust Proposed N/A
1110 Commerce Blvd., Logan 171,600 SF Dermody Properties Delivering July 2015 N/A
400 Arlington Blvd., Swedesboro 210,600 SF Liberty Property Trust Proposed N/A
Source: Cushman & Wakefield
Central & Southern New Jersey New Industrial Development
New Jersey Turnpike, Exits 2-8A

2. Garden State. In order qualify for incen-
tives, a company must be located in a
qualified area; be in need of financial
support; and, demonstrate the award is
crucial to the applicant’s decision to re-
main in, or relocate to, New Jersey. The
basis for awarding a grant is calculated
on three primary points: jobs, capital in-
vestment and net benefit. If a company
meets all three points, it is eligible for
at least $3,000 in annual tax credits for
each new job and $1,500 in annual tax
credits for each retained job. The top
five industries that benefitted the most
from Grow NJ were financial services,
manufacturing, consumer goods, en-
ergy and entertainment/media. These
five industries have accounted for 55
percent of all projects, but have re-
ceived 75 percent of all money award-
ed. Over the past 12 months, Grow NJ
has awarded more than $1.4 billion in
tax incentives to 71 companies. Approx-
imately $26 million in tax credits have
been granted to companies in Southern
New Jersey.
These numbers are not lost on region-
al, national and international inves-
tors or developers. Starting in the first
quarter of 2013 and continuing through
2015, there are 20 buildings and 7.88
million square feet of proposed, new or
soon-to-be-completed industrial proj-
ects in Central and Southern New Jer-
sey. So far the developer/owners with
recently completed projects have had
extensive local experience in the Cen-
tral and Southern New Jersey market-
place.
This is the highest level of develop-
ment activity witnessed in the market
since the start of the economic down-
turn of 2009 and 2010. After three
years of marginal investment activity
from 2010 to 2013, a real optimism has
reached the market and created a com-
petitive landscape for top industrial
developers and their capital partners.
The major developers with proposed
or projects under construction are Pro-
logis, Exeter Property Group, Clarion
Partners, Dermody Properties and Lib-
erty Property Trust.
Development Activity
The most active is Clarion Partners
with four projects at various stages of
completion totaling 3.5 million square
feet and ranging in size from 992,043
square feet to 173,333 square feet in
Middlesex and Burlington counties.
With a combined square footage of 1.43
million square feet, 2 and 3 Brick Yard
Road in Cranbury — 992,043 square
feet and 444,940 square feet, respective-
ly — will be a state-of-the-art logistics
center which will represent a significant
addition to the industrial inventory in
Central New Jersey.
In Burlington County, Clarion is also
constructing a two-building logistics
complex at 2 and 3 River Road in Burl-
ington. The larger of the two facilities is
approximately 477,460 square feet has
been reportedly leased to a major retail-
er while the smaller building is better
suited to regional occupier at 173,333
square feet.
Reno, Nevada-based Dermody Prop-
erties is developing two industrial proj-
ects in Middlesex and Gloucester coun-
ties. LogistiCenter Exit 8A is 308,428
square feet and is marketed as a dis-
tribution hub while the 171,600 square
foot LogistiCenter Logan at 1110 Com-
merce Blvd., is divisible and would be
more ideal for smaller warehousing or
distribution purposes.
Liberty Property Trust is increasing
its presence in Gloucester County with
two buildings proposed at 200 and 400
Arlington Blvd. at Commodore 295
Business Park. The new Liberty Proper-
ty Trust inventory buildings are 302,400
square feet and 210,600 square feet, re-
spectively. The company has completed
a 202,908-square-foot facility at 2277
Center Square Road, in Logan Town-
ship, and recently leased it to Amazon.
com.
International player Prologis is mov-
ing forward on two projects in Middle-
sex County. The 504,428-square-foot fa-
cility at 66 Station Road in Cranbury is
currently under construction while 117
Interstate Blvd. in South Brunswick is a
proposed 593,720-square-foot property.
Making a Name for
New Jersey Industrial
The scale of industrial development
activity in Central and Southern New
Jersey has catapulted the region to an
institutional pedigree as seen only in
primary North American distribution
markets such as the Inland Empire,
Dallas, Chicago, Miami, Lehigh Valley
(Allentown/ Bethlehem) and Toronto.
The health of these markets is directly
reflected in the amount of new capital
attracted to industrial development op-
portunities and the consistent return of
cash to investors. Post-recession indus-
trial speculation projects are a true sign
of market health, and an endorsement
by institutional capital to locate there.
The Central and Southern New Jersey
industrial markets are situated along
the New Jersey Turnpike corridor from
Exit 2 in Gloucester County through
Exit 8A in Mercer and Middlesex coun-
ties, and offer more land-buying oppor-
tunities than the land-constrained mar-
kets further north.
Since land acquisition and speculative
construction are primarily reserved for
only the most sophisticated real estate
investors, Central and Southern New
Jersey has become a safe harbor to de-
ploy capital. Largely due to the region’s
modern road and rail networks, access
to the Elizabeth and Newark seaport
infrastructure, as well as a high concen-
tration of affluent consumers, the Cen-
tral and Southern New Jersey industrial
market ranks highest among U.S. and
international investors to deploy capi-
tal. The submarkets’ close proximity to
New York City, Philadelphia and Wash-
ington, D.C., as well as an ample supply
of land and labor, create a stable market
offering consistent returns to real estate
investors plus an attractive location for
companies to add facilities, plants and
equipment.
In summary, the Central and South-
ern New Jersey industrial market is
strong, and is now capitalizing on de-
velopment advantages and the eco-
nomic recovery. The industrial market
is a bright spot in the state’s economy
and continuing to attract investors who
want to leverage the strong infrastruc-
ture and growing demand for Class A
logistics and distribution centers. The
only potential risk is the market’s buoy-
ancy and could be the loss of discipline
by institutional investors who have not
learned lessons from previous down-
turns in the development cycle.
Matthew Marshall is a Managing Director with
Cushman & Wakefield.