Despite national headwinds and a volatile interest rate environment, the industrial market in Orange County remains strong. Over the last few years, Orange County has emerged as a cost-effective alternative to Northern New Jersey, boasting similar market and labor access at a more affordable lease rate. Although there is strong market interest, the financial conditions and lingering supply chain issues make speculative construction and development difficult in this environment.
Tenant Activity:
During the first quarter, the Orange County Partnership has responded to over twelve site selection requests coming from various sectors, including – advanced manufacturing, offshore wind supply chain, food and beverage, warehouse/distribution, and pharmaceutical production and logistics. At the same time, we’ve held a handful of site tours with out-of-state site selectors and corporate brokers with various industrial requirements.
Development Activity:
Local, regional, and national developers continue to advance sites across the Orange County market – including Scannell Properties, Crow, RDM, CityView Commercial, Ridgecut Road, Treetop Development, Matrix Development, and others. Industrial rents continue to grow while absorption remains steady. Additionally, the Orange County Partnership and Orange County IDA secured $462,500 via the FAST NY site development program to help advance the forthcoming Aden Brook Business Park in the town of Montgomery – a 100-acre farm site that will be positioned to accommodate advanced manufacturing.
Construction Activity:
Despite interest rate concerns, the speculative development and construction pipeline remains strong. The Orange County Partnership forecasts that there will be around 2 million square feet of speculative industrial projects that will break ground in 2024, including projects in Newburgh and the Town of Wallkill. This does not include the 850,000-square-foot Scannell Properties build-to-suit project in Wawayanda. Recently, Brookfield properties delivered 312,000 SF of speculative industrial space on Neelytown Road, and RDM is soon to deliver a 117,500-square-foot industrial building on Police Drive in Goshen.
Dynamic tenant interest, site readiness, and speculative construction activity are strong indicators of a steady, growing market despite a complicated interest rate environment.
