New Jersey Office Market
The Northern New Jersey office market recorded an 80-basis-point year-over-year decline in vacancy, reaching 18.5%, even as leasing activity slowed. Occupiers are increasingly gravitating toward newer, recently modernized buildings, with amenity-rich properties experiencing stronger leasing velocity and rental rate growth. Net absorption totaled 324,502 SF in the third quarter of 2025, positioning the market on pace for a full year of positive absorption. Leasing activity declined 17.4% quarter-over-quarter, totaling just over 1.9 MSF in the third quarter of 2025. However, the slowdown did not weaken overall market fundamentals, as net absorption remained positive and availability edged down 20 basis points to 23.3%. Class A space continues to lead the market, with demand concentrated in top-tier and trophy assets, which accounted for 69% of total leasing activity by SF.
New Jersey Industrial Market
Industrial vacancy in Northern and Central New Jersey declined in the third quarter of 2025, falling 30 basis points to 5.9%—the largest quarterly decrease in more than three years. Strong leasing momentum and a slowdown in new deliveries drove positive net absorption of 2.57 MSF. Industrial leasing activity surged during the third quarter, totaling just under 9.1 MSF, a 5.7% year-over-year increase. Tenant demand was led by third-party logistics (3PL) firms, which accounted for 50% of total leasing volume and all five of the quarter’s largest transactions. Sublease availability contracted for the first time in two years, declining 1.7% quarter-over-quarter to just above 11.5 MSF at the close of the third quarter. The combination of reduced sublease space and positive absorption suggests the market may be moving past its vacancy peak.
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