While the broader Philadelphia Super Region worked to find its equilibrium in 2025, the Southern New Jersey industrial market emerged as a vital—and increasingly distinct—logistics engine, according to a recent report from Colliers.
The year concluded with a tale of two submarkets: Burlington County outperformed regional averages with robust leasing, while Gloucester and Salem Counties began the slow process of absorbing a significant wave of speculative “big box” deliveries.
Entering 2026, industry experts point to a “precipitous” 90% drop in regional construction starts as the primary catalyst for market stabilization. For Garden State landlords and tenants, the era of massive speculative delivery is giving way to a period of measured absorption.
Burlington County solidified its status as a “safe haven” for industrial occupiers in 2025. Strategically positioned between the Philadelphia metro and the Central New Jersey distribution hubs, the submarket maintained a vacancy rate below 8%—a sharp contrast to the double-digit vacancies seen in neighboring counties earlier in the year.
2025 Burlington Highlights:
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Total leasing: Exceeded 4.4 million square feet (MSF).
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Net absorption: Surpassed 3.2 MSF, driven by a mix of third-party fulfillment and food-grade distribution.
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Pricing power: Average asking rents held firm at $13.25 per square foot, reflecting limited competitive supply and high demand for proximity to the NJ Turnpike.
Further south, the market is navigating the aftermath of a massive delivery cycle. Vacancy rates in Gloucester and Salem Counties spiked in late 2024 and early 2025 as millions of square feet of speculative “big box” space hit the market simultaneously.
However, the fourth quarter of 2025 showed signs of a turnaround. Net absorption stabilized and turned marginally positive as port-oriented users began to target large-block opportunities at more competitive price points. With zero new construction starts in these counties at year-end, the “supply overhang” is expected to shrink throughout 2026.
The most significant trend defining the New Jersey landscape is a clear “flight to quality.” Modern bulk facilities (over 200,000 SF with 36’+ clear heights) continue to attract tenants even as older, “legacy” assets struggle with vacancy.
The massive 1.4 MSF lease to DrinkPak just across the river in Philadelphia is also expected to have a “halo effect” on New Jersey, as supporting suppliers and secondary logistics firms look for space in nearby South Jersey corridors to service the new manufacturing hub.
“We anticipate that current supply will continue to be absorbed through 2026,” noted regional analysts. “The lack of large 1-million-square-foot opportunities in the pipeline means that the current vacancy window for major tenants will likely close by mid-year.”
As construction completions taper off, Southern New Jersey is poised for a “landlord-favorable” shift by early 2027, driven by New Jersey’s fundamental lack of developable land and its unmatched access to the East Coast’s 58 million consumers.
