New Jersey Office Market
The Northern New Jersey office market experienced a 40-basis-point decrease in vacancy rates quarter-over-quarter, reaching 19.1%, driven by heightened leasing activity and increased tenant demand. Leasing activity surged in 2024, exceeding 2.4 MSF during the fourth quarter alone. This represents a 23.1% increase since 2020, marking the highest activity level in the past five years. Net absorption was a positive 752,262 SF in the fourth quarter of 2024, reflecting a tighter market as large block availabilities become increasingly scarce. Year-over-year, availability dropped by 2.0%, signaling positive momentum in the market. Sublease availability also continues to decline, reaching 4.2%, its lowest level since the first quarter of 2020.
New Jersey Industrial Market
The vacancy rate increased by 20 basis points quarter-over-quarter to 5.5% in the third quarter of 2024. Despite the rise in vacancy over the past two years, the market remains healthy, standing 130 basis points below the twenty-year trendline. Even with robust deliveries, increased availability, and economic uncertainties, the market recorded one of its strongest leasing quarters in the last two years. While overall leasing activity remains below post-pandemic averages, Class A warehouse leasing surged throughout 2024, accounting for more than 52.42% of year-to-date leasing activity. The average deal size reached 187,867 SF in the third quarter of 2024, reflecting continued strong demand for quality space in Northern and Central New Jersey. Sublease availability closed the third quarter of 2024 at 8.3 MSF, a 23.4% increase quarter-over-quarter. A key factor behind this surge is the addition of 1,281,000 SF at 904 Cranbury South River Road in Monroe Township. The space, previously occupied by Home Depot following their signing of the largest lease in Q4 2022, has now returned to the market.
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