100 Plaza Drive in Secaucus
By Joshua Burd
The northern and central New Jersey office market cooled in the third quarter, with muted leasing volume and most deals taking place in spaces smaller than 50,000 square feet.
According to CBRE, the lack of large-block transactions was a key factor in the market recording just 702,000 square feet of new tenant commitments in Q3, down 34 percent from the prior quarter and 40 percent below the five-year quarterly average. New leases of 50,000 square feet or more equated to only 19 percent of the overall volume — down from 26 percent in Q2 — while the firm found that there were no new deals of 100,000 square feet or greater for the second straight quarter.
Multiple reports cited NBA’s roughly 265,000-square-foot short-term renewal at 100 Plaza Drive in Secaucus as the region’s largest office lease of Q3.
“Renewals made up a greater share of total velocity for the first time in several years reflecting cautious sentiment,” CBRE wrote. “Financially challenged owners, a softening labor market, tariff impacts and fewer quality options have made occupiers hesitant to commit capital toward relocations or expansions, opting instead to renew in place and defer major capital outlays.”
The report was not entirely negative, noting that the overall availability rate rose by only 10 basis points to 24.5 percent. The firm noted that supply within top-tier buildings continued to tighten, with the availability rate at such properties falling 80 basis points from the prior quarter to 18.3 percent and average asking rents hovering at $41.68 per square foot, 31 percent higher than the overall market.
Research by JLL was similarly sanguine in the face of large users pulling back. The report by the firm’s Steve Jenco also cited the positive trends in so-called Premier Class A properties, or those constructed or significantly renovated within the last 10 years, noting that the ongoing demand for premium office space coupled with constrained supply has been sustaining rent growth in the subset.
That helped year-to-date absorption, or the change in occupied space, reach 389,960 square feet through Q3, more than doubling the 192,140 square feet absorbed during the same period in 2024, JLL found. As a result, the firm said office vacancy in northern and central New Jersey was 26.4 percent as the fourth quarter began.
Jenco, meantime, pointed to signs of growing demand on the horizon.
“While leasing volume was constrained during Q3, additional tenant requirements could signal more companies are moving forward with their long-term workplace strategies,” Jenco, a vice president and director of office research for JLL’s New Jersey team, wrote. He noted that there were more than 5.2 million square feet of active tenant space requirements in Q3, up from 4.6 million square feet one year ago.
“Furthermore, over 30 percent of these requirements spanned multiple submarkets, which suggested a strategy of prioritizing the quality of office product over a specific geography.”
