NAI James E. Hanson’s Q1 Industrial Report, released earlier this month, details how the commercial real estate firm maneuvered through a business landscape paved with macroeconomic uncertainties, many coinciding with Trump Administration tariffs and policy changes.
While prices are up across the board on just about everything, industrial real estate averages per square foot (PSF) in the first quarter of this year fell slightly to about $14.03 PSF. This represents a 1.6% decrease year-over-year since Q1 2024 and a 2.2% decrease from the historical high of $14.35 PSF in the middle of last year.
The average of $14.03 is not consistent across all of NAI Hanson’s properties, with areas like the Meadowlands seeing averages over $17 PSF.
Aside from macroeconomic unknowns, lack of absorption also played a role in the small decline in PSF average in the first quarter. NAI Hanson recorded an absorption of –191,157 square feet, meaning construction outpaced demand.
However, construction rates are lower in Q1 2025, with about 2.2 million square feet delivered compared to 4.6 million in Q1 2024. This points to the decline in absorption over the last few years being more reflective of weak demand rather than strong construction, according to the report.
Leasing activity in the first quarter of this year was about 4.7 million square feet, a loss of about 2 million square feet year-over-year. This loss in demand could have a negative effect on new construction, with only 6 million square feet expected in 2025 compared to the 12 million in 2024.
About NAI Hanson
NAI James E. Hanson is a commercial real estate firm that offers real estate services across parts of New Jersey, New York, and Pennsylvania. Founded in 1955 by James E. Hanson as James E. Hanson & Company, the firm was among the first to join the NAI Network in 1982. The current President, William C. Hanson, as the grandson of James E. Hanson. He was appointed to the position in 1993 and under his leadership the firm has acquired numerous other real estate firms, including Schilp & Co. Realtors and The Garibaldi Group.