South Jersey’s warehousing boom is still hot. But it could be slowing.

In Salem County, New Jersey, way down at the southern tip of the state, 5.1 million square feet of warehouse space has gone up since 2020, according to CoStar data. The boom has transformed the largely rural South Jersey county into one of the hottest logistics hubs in the state, and with another 2.1 million square feet under construction, and an additional 5.3 million proposed, it doesn’t look like the building spree is ending anytime soon.

On the ground, however, there is a sense that even amid this gold rush, warehouse development is about to hit a wall in Salem County.

“If I were to make a prediction—and I can do that because I don’t know shit…they’re gonna overbuild,” Grant Harris, fourth-generation owner of the Cowtown Farmers Market and Rodeo, located on one of the hottest corridors for warehouse construction, told Retail Brew.

Ryan Curran, a New Jersey-based broker who helped assemble a large property now occupied by Amazon fulfillment centers, said he’s not worried about overbuilding—given that many of the investors involved are generally pretty conservative about where they place their money—but in the short term, the area is hitting its capacity in terms of warehousing.

“For the time being, until there’s another cycle 10 years from now, I don’t think there’s going to be too much additional product stuffed into the pipeline,” he said.

Slowing their roll: This kind of pullback is already apparent in the broader warehousing market, which continues to experience excess capacity, falling rents, and higher vacancy levels, per data from the logistics giant Prologis. The firm reported in November that development starts were down 20% year-to-date, and that new construction was at its lowest levels since 2017 as a result.

The drop-off is due in part to vacancy rates “approaching peak” in Q3, Prologis explained, “as customers work through excess capacity and await greater certainty to make long-term supply chain decisions post-election.”

Amazon, meanwhile, has dealt with the repercussions of overbuilding since at least 2022, when the company shifted into cost-cutting mode, scrapping some planned developments and shuttering others. This was just one year after Amazon opened its facility in Salem County, which helped kick off the warehouse boom in the area.

• The e-commerce giant has since resorted to sub-leasing space at its facilities to save money, with many in the market following suit.

Now Amazon is beginning to bounce back from this market correction with new investments in logistics, and Prologis is anticipating a similar comeback for the broader market, which it predicts will see a return to rent growth at least in the second half of 2025.

Technology-driven: However, what this means for Salem County is unclear, especially as investment in new technology drives retailers to overhaul their logistics footprint.

Walmart shut down a warehouse in Salem County last June, moving its operations to a new facility in Greencastle, Pennsylvania, which is located nearly 200 miles to the west off Interstate 81. Jeffery Essary, director of corporate communications at Walmart, said in an email to Retail Brew that the move was designed “to deliver packages to customers with greater speed.” The warehouse is one of the retailer’s “next generation fulfillment centers,” which uses robots and machine learning to increase the availability of two-day shipping to customers.

Yet it won’t be a net loss for Salem County overall, as Walmart is planning to open a “new high-tech perishable distribution center” in nearby Pilesgrove, New Jersey. The build out is a part of Walmart’s plan to expand its grocery delivery business.

The longer view: Looking at the bigger picture, Curran said his bullishness about warehouses is based on his view of the longer-term evolution of retail away from brick and mortar. “I live in an area that’s pretty densely populated and more of a North Jersey market, and I drive around and I see these malls that have been super successful for decades are now dark,” he said.

Contained in that anecdote, however, is arguably its own cautionary tale. As Donna Rendeiro, executive director of the New Jersey Planning Commission, emphasized, economic development models come and go, and someday the state could find itself saddled with a number of massive buildings with no tenants.

“Just like the suburban office parks of the 1980s that were great at the time, many of them are abandoned, and many of them are vacant,” she said.