In our Spotlight on Business Report tonight.

New Jersey was once known as the medicine chest of the nation because of all its pharma companies.

But in recent years, that moniker shifted to the warehouse state as countless warehouse facilities popped up in every corner of the state.

But a recent report on the warehouse industry shows the numbers are declining I'm joined now by our contributing writer Jon Hurdle to explain what's happening.

Jon, great to talk to you as always.

What can you tell us about the amount of decline that we've seen recently in warehouse spaces here in New Jersey?

Well, one of the interesting things about the latest data that we're seeing is that the vacancy rate in the second quarter of 2023 actually edged up a little bit in North and Central Jersey to about 3.1% from 2.8% at the end of last year.

And the reason that that's interesting is that many opponents of the warehouse boom that we hear so much about these days have been looking for any sign that the market is oversupplied and this vacancy rate would suggest that it's moving in that direction.

So does that tell us then, that this recent warehouse boom that we saw might have just been a bubble that is now bursting?

What do we know about the why?

Well, we really don't know very much yet.

One thing that we should mention is that the construction pipeline, the amount of warehouses that are still being built, is still rising very rapidly in that north and central Jersey area.

In the latest quarter, about 13 million square feet of warehousing was under construction, and that was the highest for about a year.

Do you foresee a future in which New Jersey is left with all of these empty warehouse spaces?

Well, it's very hard to say at the moment.

And the other countervailing force, if you like, is that rents are continuing to rise.

And what the industry tells me is that that's because there is increasing there's a sustained demand for so-called Class A warehouse space.

And so many logistics companies are going to be looking for top grade space.

And that apparently is is continuing to buoy the market.

Jon, what do we know about the feeling of residents about warehouse space as we've seen battles play out in municipalities where warehouses were planned?

Do you think that that's having having any impact on this slight shift that we're seeing?

Well, the report that that we've just seen from Newmark, a commercial real estate firm, does note the growing resistance from some municipalities as a result of a lot of concern by their residents to warehouse proposals.

And they also note that there are a number of bills in the state legislature which are seeking to curb the expansion of warehouses in certain ways.

There continues to be a lot of a lot of disquiet, a lot of concern among among some communities about the about this warehouse boom.

But but there's no sign yet that it's that the boom is either really slowing or that that these opponents are getting their way.

Yeah.

Jon Hurdle, great reporting, as always, contributing writer for us right here at NJ Spotlight News.

Thank you.

You're welcome.

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