Port Trends to Watch
The Port of New York and New Jersey (PNYNJ) has consistently held its position as the busiest port on the East Coast, serving as a key gateway. With six container terminals and multiple cargo rail lines, the PNYNJ services one of the world’s most affluent and densely populated consumer bases. The Port boasts the largest 250-mile radius population of any port in North America, with over 60 million people making up one-third of the country's GDP. Given the substantial surrounding population, the PNYNJ significantly drives demand for many industrial markets across the Northeast and Mid-Atlantic U.S.
Ranked as the nation’s second-busiest seaport for loaded containers handled in 2023, the Port of New York and New Jersey maintains a high volume of container traffic. This sustained activity aligns with the PNYNJ’s strategic initiative to enhance port capacity, demonstrated by the recent $220 million project announcement. This investment aims to redesign and rebuild the northern entrance of Port Newark, emphasizing the Port’s commitment to continuous improvement and expansion. Despite a year-over-year (YOY) decrease of 17.7%, the full-year container volume totaled 7.8 million TEUs, notably surpassing pre-pandemic levels. Compared to 2019, total cargo transport at the PNYNJ increased 4.4%, indicating a steady flow of trade activity.
The Port Region Warehouse/Distribution Market
The vacancy rate in the Port Region grew 240 basis points YOY, reaching 5.3%, primarily due to the delivery of new product to the market. Among these, the largest newly developed property delivered vacant this year was the 332,640-square foot (sf) development at 101 Port Lincoln Boulevard in Bayonne, followed by a new 178,200-sf warehouse at 2013 McCarter Highway in Newark. After posting 2.0 million square feet (msf) of positive net absorption in 2022, the Port Region witnessed a reversal in 2023, transitioning into negative territory with 430,889 sf of occupancy losses.
Leasing activity surged in the fourth quarter, surpassing the 1.0 msf mark for the first time since the first quarter of 2021. The fourth quarter demand of 1.1 msf helped push the year-to-date figure to 2.3 msf, a 45.5% increase from the same time last year. Renewal activity followed suit, swelling to over 1.2 msf—the highest quarterly total over the last decade—and was driven by 619,953 sf of renewals in the fourth quarter. The average asking rent rose by 3.3% YOY to $19.91 per square foot. Both asking and taking rents have improved over the last year, particularly within centrally located new developments and higher-quality space.
