Amalfi Capital invests in Denholtz Properties N.J. 3 building Light Industrial Flex Warehouse Development.
A three-property, light industrial ground up development portfolio located across multiple infill pockets of Central New Jersey, a top 5 industrial market in the U.S.
Extremely Tight Market with Ninth Highest Rent Growth in the Country at 13.6% YoY: CBRE recently came out with a report listing North Jersey as the top market in the nation for industrial rent growth. First-year rents were up 33.3% overall, year-over-year in North Jersey as of May 2021, while Central New Jersey was the top ninth market with 13.6% YoY rent growth. The Central New Jersey industrial market has a current vacancy rate of 2.7%. The lack of available space has pushed rent levels, with warehouse rents increasing to an average of $9.53 NNN and $15.09 NNN for flex/light industrial.
Massive Barriers to Entry: Due to land scarcity and high barriers to entry, primarily from strict zoning regulations, opportunities to construct industrial in New Jersey prove scarce and complicated. This, in conjunction with increased demand for space nearby skilled labor pools, dense populations, and easy highway access, has kept occupancy above 97% and pushed rents to new record levels.
Highly Sought-After Product Type — High-End, Small Bay Industrial: Denholtz plans to capitalize on a product in significant demand: high-end small bay industrial product in underserved markets. This product captures premium rental rates and witnesses significant leasing velocity. Current inventory in the submarket is dated, averaging a year built of 1984, making most product over 35 years old with low clear heights. Further, the average delivery in the past five years is over 250,000 SF and designed for a single tenant. The product type for this portfolio allows for smaller tenants to take space in new-builds with high clear heights, a niche product that is being absorbed extremely fast.
Very Experienced Sponsor: Denholtz is headquartered in New Jersey and developing in their own backyard, making them extremely familiar with the location of the developments and well versed in this property type based on their track record. Denholtz currently owns and manages approximately 2,500,000 SF of multi-tenant industrial property, and has witnessed the unfaltering demand for new light industrial space from local, regional, and national tenants.
“We are super excited to invest in our own backyard in what has become a very in demand warehouse flex space product. Together with a developer that is also based in New Jersey and who is a vertically integrated firm that handles all aspects of the build process. They have 70+ years of experience in bringing these types of properties to market and we couldn’t have chosen a better partner” said Mike Schnurr, m.p. of Amalfi.
Amalfi Capital is a real estate equity firm founded in 2015 that is an investor in over 1 million square feet of property with a gross value over $125 million throughout the United States. Amalfi focuses on expanding its portfolio by acquiring residential, commercial, & industrial assets that it believes are well positioned for above market returns over the long run. Amalficapital.biz – amalficapitalinfo@gmail.com