Selective Insurance Group Inc. will occupy 122,525 square feet at 103 John F. Kennedy Parkway in Short Hills in conjunction with a building update by Columbia Pacific Advisors LLC. — Rendering courtesy: Cushman & Wakefield
By Joshua Burd
Office vacancy in New Jersey is ticking downward after a positive fourth quarter, capping a year that saw high-end buildings continue to shine and a notable decline in sublease space.
A report by JLL found that net absorption, the change in occupied space, reached nearly 330,000 square feet in Q4 and some 720,000 square feet in 2025 overall. That caused office vacancy in northern and central New Jersey to slip to 26.2 percent after being stuck slightly higher in the second and third quarters, marking the region’s lowest level since early 2023.
Tim Greiner, JLL’s lead office broker in New Jersey, said the office market is “quietly stabilizing” after three consecutive quarters of positive absorption, “signaling that occupiers are making deliberate, long-term real estate decisions again.” Landlords are also benefiting from a shrinking supply of sublease space — now at a five-year low in the Class A segment— after tenants leased the top-tier spaces in 2025, while other blocks transitioned to direct listings or tenants withdrew subleases from the market.
“Looking ahead to 2026, we expect tenant confidence to improve further as interest rates gradually ease and capital markets regain traction, but demand will remain highly selective,” said Greiner, an executive managing director with JLL. “Flight-to-quality will persist as companies prioritize efficiency, amenities and talent retention, while obsolete buildings face mounting pressure.”
Researchers with Cushman & Wakefield were similarly optimistic after what they said was 1.3 million square feet of leasing activity in Q4. Notably, the firm said Class A office spaces captured 60.3 percent of tenant demand, supporting the thesis for landlords that invest in renovations and new amenities.
That was evident in the largest lease of the quarter, at 103 John F. Kennedy Parkway in Short Hills, where Selective Insurance leased 122,525 square feet for its new headquarters under a deal with Columbia Pacific Advisors LLC. JLL’s Greiner, Executive Vice President Dan Ligorner and Senior Vice President Mike Pietrowicz represented ownership, while Cushman’s David DeMatteis, Robert Rudin, Jan Randall and Christina Magill represented the tenant.
“The New Jersey office market is finding its footing, with Class A spaces leading the way in attracting tenants and stabilizing the market,” Bill Simoneau, a senior research manager at Cushman & Wakefield, wrote in a note highlighting resilient leasing activity.
JLL also expects New Jersey’s office inventory to continue shrinking this year as owners of vacant, outdated buildings opt to redevelop them as residential, industrial and other alternative uses, the firm’s research team wrote. Developers in the state have removed more than 8.5 million square feet of supply during the past five years, the report said, while another 1.6 million square feet is slated to come down in 2026.
Selective Insurance moving headquarters, leases 123,000 sq. ft. in Short Hills office deal
