As 2025 draws to a close, a record-breaking federal government shutdown has left economists and industrial real estate leaders flying blind. The 43-day lapse in appropriations, the longest in U.S. history, severely disrupted the flow of economic data, leaving the year-end picture for New Jersey’s economy incomplete.
According to NAI James E. Hanson’s latest industrial market report, the Northern New Jersey market is currently navigating a “healthy recalibration.” After years of frantic development and hyper-growth, the market is shifting toward a balanced phase where supply and demand are finally reaching equilibrium.
The federal shutdown has delayed critical job reports from the Bureau of Labor Statistics (BLS) and the Bureau of Economic Analysis (BEA).
While the broader economy faces headwinds, Northern New Jersey’s industrial market remains anchored by strong fundamentals. Vacancy rates have remained relatively flat over the last four quarters, hovering between 6.0% and 6.5%.
The recalibration is largely driven by a significant easing in new construction. Only 7.0 million square feet of new product was delivered in 2025—less than half of the 2024 total. This reduction in supply has allowed superior-quality, Class-A assets to continue commanding premium rents.
Submarket Performance Highlights:
| Submarket | Class A Asking Rent | Vacancy Rate | Market Note |
| Ports (Newark/Elizabeth) | $22.24/SF | 6.0% | Highest-priced submarket in Northern NJ. |
| Exit 8A (Middlesex) | $21.50/SF | 6.4% | Over 2.0M SF slated for delivery in next 18 months. |
| Meadowlands | $19.50 – $21.00/SF | 5.7% | Stable for 7 quarters; vacancy trending down. |
| 78/287 Corridor | $16.50/SF | 8.5% | No new construction slated for the next 12 months. |
| 46/23/3 Corridor | $17.00 – $19.00/SF | 5.3% | Remarkably stable pricing over the last two years. |
In a proactive move to stave off a further economic slowdown, the Federal Reserve lowered interest rates by a quarter percent in December—the third such cut in 2025. This may provide much-needed breathing room for developers and tenants alike as they look toward the new year.
NAI Hanson reports that despite the stability of average rents, over 30 deals were completed in 2025 with starting rents at or above $20.00 per square foot. With very little new construction currently underway in several key submarkets, vacancy is expected to tighten through the first half of 2026.
As demand remains sustained and supply narrows, tenants in 2026 should expect increased competition for high-quality, Class-A space, likely leading to a new upward push on rental rates.
