Duke Realty Preleases New Jersey Warehouse
China’s largest online retailer will occupy the 216,892-square-foot warehouse once complete later this year.
Start Your Application and Unlock the Power of Choice$5.6M offered by a Bank$1.2M offered by a Bank$2M offered by an Agency$1.4M offered by a Credit UnionClick Here to Get Quotes!Duke Realty has signed a full-building, 216,892-square-foot industrial prelease agreement with tenant JD.com in Piscataway, N.J. The tenant, China’s largest online retailer, also operates a business-to-business platform known as JoyBuy. Duke’s development is slated for completion this fall.
Colliers International worked on behalf of Duke Realty to close the deal, while Cushman & Wakefield and Kander Pacific represented JD.com.
Duke broke ground on the facility at 1570 S. Washington Ave. in the first quarter, satellite imagery indicates. The industrial owner-developer acquired the 9.4-acre site last year, paying $10.7 million for the parcel, public records show.
The industrial property will have direct access to Interstate 287, around 7 miles west of the New Jersey Turnpike. The facility will have 40-foot clear heights, 34 loading doors, and parking for 38 trailers and 125 cars. M + H Architects designed the project to achieve LEED certification.
New Jersey’s Tightening Market
Demand for industrial space keeps pushing New Jersey’s market to all-time highs. Vacancy in the market was at 1.0% at the end of the first quarter, a recent JLL report highlights, citing a limited development pipeline. This is especially striking when looking at modern, higher-end space: New Jersey’s vacancy for Class A space was at 0.5%. While there’s now more than 22 million square feet under construction, it is unlikely to have a large dent in the historically low vacancies.
This has had a significant impact on asking rents, with Class A rates jumping an incredible 38.4% over the year, the report noted. JLL concludes that competition will remain fierce among tenants, and rents are very likely to drive even higher through the rest of 2022. Strong rent growth has also made the development of industrial properties economically more feasible despite growing construction costs, pushing the planned pipeline to over 80 million square feet in New Jersey.
Related Questions
What are the benefits of preleasing a warehouse in New Jersey?
The benefits of preleasing a warehouse in New Jersey include the ability to secure space in a market with relatively low supply and high demand. This demand dynamic has driven further speculative industrial developments, which itself led to a small increase in vacancy over Q1 2019, though this space will very likely be quickly absorbed. Additionally, tenants can benefit from increased rents, which have increased to $8.78 per square foot, a nearly 7% increase over the last 12 months.
For more information on warehouse financing, please visit Commercial Real Estate Loans.
What are the requirements for obtaining a loan for a warehouse in New Jersey?
The requirements for obtaining a loan for a warehouse in New Jersey depend on the type of loan you are looking for. For SBA loans, the requirements include a minimum credit score of 680, a minimum of two years in business, and a minimum of $100,000 in annual revenue. Additionally, the business must be located in the United States and the loan must be used for a business purpose. For more information on SBA loans, please visit SBA 7a and SBA 504 Loan. For other loan products, please click the button below and fill out a short, secure form for a fast, easy, and free commercial loan quote from a commercial mortgage banker.
What are the advantages of investing in a Duke Realty warehouse?
Investing in a Duke Realty warehouse can offer a number of advantages. Duke Realty is a leading industrial real estate company with a portfolio of over 150 million square feet of industrial space. Their warehouses are typically well-maintained and offer a variety of features, such as high ceilings, ample column spacing, and modern loading equipment. Additionally, Duke Realty warehouses are often located in prime locations, close to highways and other transportation infrastructure, which can help to drive value for investors. Finally, Duke Realty warehouses can also offer a great opportunity for value-add investments, as they may be dated and require some repositioning to bring them up to speed.
What are the risks associated with preleasing a warehouse in New Jersey?
The risks associated with preleasing a warehouse in New Jersey include the potential for higher vacancy rates due to the limited supply of industrial space, as well as the potential for higher rents due to increased demand. Additionally, the cost of acquisitions in New Jersey is high, with industrial asset pricing averaging $169 per square foot through July, according to Yardi Matrix. This may make it difficult for investors to secure financing for acquisitions, especially for large, Class A properties.
What are the tax implications of preleasing a warehouse in New Jersey?
The tax implications of preleasing a warehouse in New Jersey depend on the type of business entity you are operating. If you are operating as a sole proprietorship, you will be subject to self-employment taxes on the income you earn from the prelease. If you are operating as a corporation, you will be subject to corporate income taxes on the income you earn from the prelease. Additionally, you may be subject to local taxes, such as property taxes, depending on the location of the warehouse.
For more information on federal tax implications for commercial real estate in 2022, please see this article.
For more information on apartment loans in New Jersey, please see this article.
What are the financing options available for preleasing a warehouse in New Jersey?
The financing options available for preleasing a warehouse in New Jersey depend on the size and scope of the project. For smaller projects, you may be able to use conventional apartment loans, Fannie Mae apartment financing, Freddie Mac apartment financing, FHA/HUD financing, mezzanine financing, CMBS loans, bridge loans, or apartment construction loans. For larger projects, you may need to look into larger loan products such as those offered by Apartment.loans. Apartment.loans offers apartment loans with terms and amortizations of up to 30 years, with recourse and non-recourse options, and flexibility when it comes to prepayment. New Jersey apartment building loans typically close within 45 days of application. With the apartment.loans streamlined application process (with no-cost and no-obligations), gain unbiased access to the best possible apartment financing in the state of New Jersey!
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