Port Trends to Watch
The Port of New York and New Jersey (PNYNJ) remains the busiest port on the East Coast, serving as a vital gateway for global trade. With six container terminals and multiple cargo rail lines, the PNYNJ services one of the world’s most affluent and densely populated consumer markets. The Port has the largest 250-mile radius population of any North American port, encompassing more than 60 million people and one-third of the U.S. GDP.
In 2024, the PNYNJ navigated a series of significant challenges, including labor disruptions, infrastructure failures at neighboring ports, and geopolitical issues. Despite these hurdles, the Port handled 8.7 million TEUs—an impressive 11.4% increase from 2023—making it the third-busiest year on record, trailing only the pandemic-driven peaks of 2021 and 2022. This performance exceeded the Port Authority's 2019 projections by 5.0%, underscoring its resilience and strategic importance. The port community demonstrated exceptional adaptability, minimizing disruptions from unexpected events such as the Francis Scott Key Bridge collapse near Baltimore and a three-day International Longshoremen’s Association strike in October.
Looking ahead, the Port Authority has launched key projects to drive future growth. A landmark agreement with the U.S. Army Corps of Engineers will explore deepening navigational channels to 55 feet, while a major overhaul of the northern entrance to the Newark-Elizabeth port complex is already underway. These efforts aim to accommodate larger vessels, enhance infrastructure, and secure PNYNJ’s long-term competitiveness.
The Port Region Warehouse/Distribution Market
The Port Region is one New Jersey’s most established submarkets, fueled by strong demand from growing cargo volumes and larger ships. Its prime location near the state’s ports and major transportation routes continues to attract tenants. However, by year-end 2024, the vacancy rate in the Port Region rose by 630 basis points year-over-year (YOY) to 11.5%, primarily due to newly delivered but unoccupied developments. The fourth quarter added further vacant space, including a 363,062-square-foot (-sf) listing at 500 Supor Boulevard in Harrison and 260,000 square feet (sf) at 481 Doremus Avenue in Newark. Net absorption for 2024 totaled negative 3.0 million square feet (msf), a stark contrast to the
2.0 msf of positive net absorption recorded in 2022.
Leasing activity in the fourth quarter jumped by 28.3% from Q3 2024 to 476,906 sf but remained 7.1% below the two-year quarterly average. Annual 2024 leasing reached 1.8 msf, marking a 21.3% YOY decline. Notable transactions included Imperial Dade’s 649,072-sf expansion and renewal at 219-295 Route 1&9 and East Coast Warehouse’s 112,709-sf expansion at 202 Port Jersey Boulevard, both in Jersey City. Despite softer leasing, the average asking rent remained above $20.00 per square foot (psf), rising 5.0% YOY to $20.93 psf. This resilience underscores the sustained demand for quality industrial space within the submarket, even amid shifting market dynamics.
