By Joshua Burd
Demand for high-end office space in New Jersey is going strong, providing added momentum as developers continue to raze obsolete buildings to make way for higher and better uses.
Both trends were on display in the first quarter of 2026, as noted by market reports by multiple brokerage firms. Research by JLL found that office vacancy in northern and central New Jersey fell to 25.4 percent to start the year, hitting a mark not seen since mid-2022, thanks to an uptick in leasing and the ongoing removal of outdated buildings from the inventory.
The change in occupied space, known as net absorption, was positive for the fourth straight quarter with nearly 584,000 square feet of activity from January through March, the firm said. Notably, JLL found that leasing activity remained concentrated in Class A space, accounting for about 90 percent of absorption as tenants continued to favor higher-quality buildings and submarkets.
“The headline here is that we’re finally seeing some real traction in New Jersey’s office market as the market corrects itself and obsolete buildings are removed from the inventory,” said Tim Greiner, an executive managing director with JLL and its lead office broker in New Jersey.
“Four straight quarters of positive absorption and more than half a million square feet absorbed in Q1 alone tells us that companies are still making decisions, still committing to space, but they’re being very selective about what they take,” he added.
The report by JLL’s Steve Jenco found that the state’s average asking rent for Class A direct space reached $34.20 per square foot in early 2026, up from $33.94 a year ago. Yet properties constructed or significantly renovated within the last 10 years, which the firm classifies as Premier Class A assets, posted rents that were nearly 20 percent above the broader Class A market.
“For the rest of the year, I don’t expect a dramatic shift,” Greiner said. “We’ll likely see steady, incremental improvement with vacancy grinding down slowly, rents holding firm or pushing slightly higher at the top end.”
A separate report by Cushman & Wakefield was also sanguine despite data that indicated a net occupancy loss in Q1, following three quarters of positive absorption. First-quarter leasing activity totaled 1.2 million square feet, the firm found, while also citing a heavy concentration in newer or recently renovated properties and rising rents.
Additionally, a new analysis by Cushman highlighted a significant pipeline of inventory being removed from the market. Some 24.2 million square feet of office space across New Jersey is proposed to be or already being repurposed, the firm said, adding that competition for high-quality space is likely to intensify as tenants are displaced from properties that are marked for conversion.
“While the office sector saw a slight pullback early in the year, market conditions are notably healthier than they were a year ago,” said Bill Simoneau, senior research manager at C&W. “The steady reduction in available sublease space and the higher rents commanded by top-tier assets indicate that companies are actively investing in better work environments. We expect the desire for high-quality spaces to drive office leasing decisions throughout the rest of the year.”
