How warehouses became essential to New Jersey’s economy

🔴 Rutgers researchers say warehouses have become the backbone of New Jersey’s economy.

🔴 Nearly 1.35 million jobs and hundreds of billions in business activity are tied to logistics and distribution statewide.

🔴 Environmental advocates warn warehouse sprawl is harming communities.

Researchers at Rutgers University have found that warehouses are now the lifeblood of New Jersey, despite massive pushback from residents over the years.

The Garden State has more than 1 billion square feet of warehouses and distribution centers, according to the recent report from the Center for Advanced Infrastructure and Transportation at Rutgers. And 95% of that space is being used.

Like it or not, New Jersey has earned its nickname: the Warehouse State.

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But it's not a fair nickname, according to Dan Kennedy, CEO of the New Jersey chapter of the Commercial Real Estate Development Association.

"I think it's fair to call it a logistics state, with warehouses being a component of the logistics industry. Warehouses cannot be looked at in isolation from the greater logistics complex," Kennedy said.

Why New Jersey is ideal for logistics and distribution

New Jersey has a dense population of over 9.5 million people. And, perhaps more importantly, it's located in a corridor of one of the most wealthy and densely populated regions in the world.

It's home to the Port of New York and New Jersey, the busiest port on the East Coast. The state also has 39,000 miles of public roads, including major highways that are ideal for trucks, like the Turnpike, the Garden State Parkway, Route 1, and I-80.

Those three factors combine to make New Jersey ideal for warehouse development, Kennedy said.

Warehouses drive jobs, income and tax revenue

Distribution and logistics is the second-largest industry in New Jersey, only barely behind healthcare, according to the state Labor Department. It supports more than 447,000 jobs, or 12.2% of the private workforce.

However, the CAIT report finds that warehouses and distribution centers have a bigger impact on the state's economy than the state knows.

Nearly 764,000 workers are inside these buildings in New Jersey, according to the Rutgers report. And warehouses support, directly or indirectly, 1,350,000 jobs in the state.

"This is probably a more accurate reflection than the Department of Labor data, because we're picking up what we believe to be the entire workforce that's associated with warehouse and distribution centers," Kennedy said.

They estimate that warehouses generate over $295 billion in business activity and nearly $113 billion in personal income.

Warehouses have also become a boon for the state government, generating over $11 billion in local and state tax revenues.

It's an even better story for the federal government: warehouses are responsible for almost $22.6 billion in federal taxes.

Community backlash and environmental concerns

Not everyone is happy with warehouses.

One in four New Jersey residents lives within half a mile of the state's 3,000 warehouses, according to a 2024 report from the Environmental Defense Fund.

The New Jersey League of Conservation Voters has placed warehouse sprawl on its top 5 list of the most important environmental issues. Open space and diesel truck emissions are among the major concerns.

Developers see it another way; the warehouse and logistics industry is cleaner than some other industries, like chemical manufacturing.

Also, Kennedy said many warehouses are being built on properties that need redevelopment. Some of these locations have environmental cleanup costs and aren't suitable for other uses like homes and parks.

"We think the private sector is providing a great service here by providing redevelopment opportunities to clean up these contaminated sites, and put a useful use on top of it that brings jobs and economic value," Kennedy said.

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