By Joshua Burd
Blue-chip tenants are coming back to New Jersey’s industrial market, boosting lease activity to start the year as occupiers search for higher-end warehouse and logistics space.
Multiple research reports cited a jump in deal volume in the first quarter. JLL, for instance, tracked 13.1 million square feet of leasing as activity “surged above pandemic averages,” with high-quality tenants returning to the market amid “a fundamental shift in demand patterns from previous quarters.”
The firm also noted that new leases accounted for 10.1 million square feet of transactions and continued to be focused on the Class A segment, which saw 6.1 million square feet in first-time deals in Q1, up 28.2 percent from the trailing eight-quarter average.
“We’re seeing a broader mix of large, creditworthy occupiers prioritizing high-quality space, and that’s driving Class A vacancy down and holding rents steady,” said Rob Kossar, a JLL vice chairman and head of its Northeast industrial region. “It’s older product that’s starting to give some back, and we’re seeing the separation pretty clearly in both occupancy and rents.”
The firm’s Q1 market report noted that offshore third-party logistics firms accounted for 27.6 percent of new Class A leasing, down from 40.4 percent over the past two years. Instead, name-brand tenants drove demand during the quarter, JLL said, adding that strong-credit companies took down 3.1 million square feet of new Class A space over 100,000 square feet, more than double their activity last year, marking a pivotal change in tenant demand dynamics.
The company did not identify leases by specific companies, but a separate report by Savills noted that Amazon took 490,429 square feet at 1075 Secaucus Road in Jersey City, a facility that opened in 2024 at a location just minutes from the New Jersey Turnpike. Savills also listed a 600,000-square-foot lease at 201 Middlesex Center Blvd. in Monroe by DSV.
JLL’s data found that net absorption, the change in occupied space, reached 3.91 million square feet during the first quarter. That’s similar to a figure provided by Cushman & Wakefield, which attributed the robust performance in Q1 to surging tenant demand and the successful delivery of several new projects.
Industrial vacancy in New Jersey tightened to 9.3 percent, according to Cushman’s figures. The firm added that the overall net asking rental rate reached $16.66 per square foot.
“The large leasing volume we saw this quarter shows the lasting strength of New Jersey’s industrial corridor,” said Felix Soto, a research manager at C&W. “With strong growth and less available sublease space, the market remains highly competitive. We expect this energy to continue as companies seek prime distribution locations to support their supply chains.”
Multiple reports highlighted the slowdown in new construction and limited big-box availability, at least for now. That’s likely to help the 75,000- to 250,000-square-foot segment, JLL said, where 55.3 percent of buildings delivered since 2023 remain available.
Conversely, northern and central New Jerey have just one remaining vacancy over 900,000 square feet.
“Going forward, it feels like the market is tightening again, just not across the board,” Kossar said. “If you’ve got the right product, you’re going to be in a good spot. If not, it could take a while to backfill space. It’s a more selective market, but still a pretty healthy one overall.”
