Real estate information provider Cushman & Wakefield said Oct. 1 that New Jersey’s industrial sector improved in the third quarter while the state’s beleaguered office market gave indications it was stabilizing.
Leasing activity surged in New Jersey’s industrial market at the start of the second half of 2025, with new leasing volume climbing 59.1% quarter over quarter to 8.9 million square feet.
This spike in activity was led by 28 new leases signed in the third quarter of more than 100,000 square feet, totaling 5.7 million square feet, a 24.8% increase from the prior year’s quarter.
“New Jersey’s industrial market is showing real momentum again, with large occupiers returning to the table and confidence building across the Turnpike corridor,” said Felix Soto, research manager at Cushman & Wakefield. “The shift back to positive absorption reflects a healthier balance between supply and demand.”
Strong third-quarter demand raised year-to-date leasing to 19.9 million square feet, a 4.5% increase year over year. Leasing continued to be heavily concentrated in the New Jersey Turnpike corridor submarkets, which accounted for 78.7% of total activity.
Net absorption, a key real estate metric, turned positive for the first time since the first quarter of 2023, with 4.1 million square feet of occupancy gains in the third quarter, bringing year-to-date net absorption to positive 1.0 million square feet.
Among the more significant new leases in the quarter were Sino Investment taking 480,000 square feet in Robbinsville; BroadRange Logistics signing on for 479,700 square feet in Carteret; and 4DS Logistics leasing 439,015 square feet in Jersey City.
Meanwhile, the state’s office market continued to show signs of stabilization, though there was a downtick in quarter-over-quarter leasing. Despite slower leasing activity in the third quarter, new tenants made up for additional space on the market, leading to positive absorption for the second consecutive quarter.
“Office fundamentals in New Jersey continue to stabilize, with tenants gravitating toward high-quality space,” said Bill Simoneau, senior research manager at Cushman & Wakefield. “Even as overall leasing slows, sustained demand for Class A product underscores the market’s long-term resilience.”
New leasing activity, at 1.3 million square feet, was one-third lower than the two-year quarterly average, with 62.7% of demand concentrated in Class A office space. This brought year-to-date new leasing activity to 5.0 million square feet.
Asking rents rose slightly from the previous quarter, up 0.3% to $32.55. Class A pricing grew by 1.9% year over year to $36.50 per square foot, a 12.1% premium from the overall average asking rent. The highest average submarket rents for Class A properties were recorded in the Hudson Waterfront ($46.65 per square foot) and Woodbridge/Edison ($41.26 per square foot) submarkets.
Sustained year-to-date positive absorption contributed to a 50-basis point year-over-year drop in the overall vacancy rate, now at 22.1%. This improvement is underscored by a 20.9% decline in vacant sublease space, which was a factor in the drop in overall vacancies.
Among the more significant office lease transactions in the quarter were the National Basketball Association renewing its lease in Secaucus for 264,449 square feet; PBF Energy reupping for 74,727 feet in Parsippany; and JCP&L renewing its lease in Holmdel for 69,870 feet.
