The industrial outdoor storage space continues to generate activity in the Garden State. Recently, Dalfen Industrial and Centerbridge Partners LP’s IOS joint venture marked growth on the East Coast in New Jersey. Meanwhile, the Advance Industrial Group of Bussel Real Estate Corp. saw activity in the sector with a newly brokered lease.

Dalfen-Centerbridge

The Dalfen–Centerbridge JV announced adding two IOS properties to its portfolio Aug. 8. One is a 3.9-acre storage yard in Capitol Heights, Md. In New Jersey, the partnership acquired a 1.29-acre outdoor storage site in Sayreville. Both deals were sourced off market through existing relationships, according to Dalfen. Ben McCarty of Newmark assisted in Maryland, while CBRE’s Mark Silverman helped facilitate the Middlesex County transaction. Dalfen did not disclose the purchase price for either property.

In Central Jersey, the acquired property is paved, lit and fenced. It features an approximately 8,000-square-foot service building. Like the DC location, the site also offers proximity to main arteries, in this case Interstate 95 and the Garden State Parkway.

“This fleet service building is a unique site, not only within the submarket, but within the broader IOS regional market,” commented Hontz.

Looking ahead, he said the team intends to add more, similar properties throughout the Northeast and Mid-Atlantic. “We are very excited to continue to grow our presence in the New Jersey IOS market …” Hontz said.

“As the criticality of IOS in the logistics ecosystem continues to grow, we are excited to offer additional properties catering to tenants needing these last mile solutions,” added Mike Cohen, head of acquisitions, Dalfen Industrial.

Dallas-based Dalfen is one of the largest privately owned industrial real estate firms in the U.S. and a leader in last-mile. Dalfen owns and operates over 55 million square feet of premier industrial properties throughout the U.S. Private investment management firm Centerbridge has approximately $38 billion in capital under management with offices in New York and London.

Advance Industrial

In North Bergen, BRC’s AI Group leased 3 acres of industrial outdoor storage space at 9101 Tonnelle Ave.

Senior Vice President Anthony Rittwager and Director of Asset Services Matthew Phillips represented the tenant, San Antonio Broker Services, in the transaction. Landlord Hartz Mountain Industries represented itself.

The five-year lease follows two recent deals for the same length of time secured by the AI Group.

In July, the team leased 2 acres at 80 Campus Drive in Kearny. Rittwager and Phillips represented the tenant, Lico Transport, while CBRE represented the landlord, Hugo Neu Realty Management. Previously in May, the team announced leasing a 7-acre IOS site at 79 Hartford Road in Delran. Again, Rittwager and Phillips represented the tenant, Transmaster. The landlord, Criterion Group, was represented in-house.

Rising demand

With the August deal, Rittwager commented on the rising demand for IOS. He said the niche has grown “dramatically in the last several years, as the need for strategically located sites is key for users requiring expedited delivery services.”

Regarding the property’s location: “9101 Tonnelle Ave. offers immediate access to New York City and Northern New Jersey markets due to its proximity to Route 1-9, New Jersey Turnpike, George Washington Bridge and Lincoln Tunnel,” he added.

GlobeSt identified New Jersey – along with Los Angeles/Orange County – as areas with the greatest supply barriers. Speaking generally, Green Street Managing Director Vince Tibone doesn’t expect that to change much, which will keep these properties in high demand.

Many infill areas don’t have the space available, and if they did it could be repurposed for something else. “[I]t’s very hard in a lot of markets to create new industrial outdoor storage; it has a very, very minimal tax contribution,” Tibone explained. “So cities are reluctant to entitle tax considerations, but also the fact that this is not the prettiest form of real estate. Cities generally don’t want to approve new supply.”