New Jersey’s industrial sector is entering a new era of “selective strength.” According to Q1 2026 market data from JLL, leasing activity in the Garden State has surged to 13.1 million square feet, a staggering 10% higher than the average quarterly leasing velocity seen during the heights of the pandemic.
However, experts note that while the volume is familiar, the players have changed. The current boom is being driven by high-quality “name-brand” tenants and creditworthy corporations rather than the offshore logistics providers that dominated the market over the last two years.
The data reveals a stark “flight to quality” that is splitting the New Jersey landscape in two. Class A properties—modern, high-ceiling warehouses with sustainable features—are being absorbed at a rapid clip, while older Class B and C structures are beginning to struggle.
- Class A Performance: New leasing reached 6.1 million square feet, a 28% increase over the two-year average. High-credit companies alone leased 3.1 million square feet in this segment, more than doubling their activity from last year.
- Class B/C Decline: While Class A vacancy dropped substantially, older products saw 1.7 million square feet of occupancy losses, with rents for these older buildings dipping by 2.5%.
“We’re seeing the separation pretty clearly in both occupancy and rents,” Rob Kossar, vice chairman and head of JLL’s Northeast Industrial Region said. “Going forward, it feels like the market is tightening again, just not across the board. If you’ve got the right product, you’re going to be in a good spot.”
For industrial users looking for massive footprints, the clock is ticking. Construction in Northern and Central New Jersey has hit multi-year lows, with current activity 22.9% below historical averages.
The shortage is most acute in the “big-box” segment. Currently, there is only one vacancy over 900,000 square feet available across the entire Northern and Central Jersey region. With the development pipeline constrained, experts anticipate a surge in competition for developable land, which is expected to drive land prices upward through the remainder of 2026.
Despite global economic uncertainties and elevated energy prices, JLL’s trajectory suggests the New Jersey market will continue to tighten. Overall vacancy currently sits at 6.3%, but forecasts indicate it could drop as low as 5.5% by year-end.
While landlords of older buildings may need to remain flexible on terms to attract tenants, Class A owners are holding firm on rent expectations. This suggests that for the modern logistics hubs lining the New Jersey Turnpike and Port Newark, the “landlord’s market” remains very much in effect.
“From our perspective, the data shows demand has gotten a lot more focused,” Kossar added. “It’s a more selective market, but still a pretty healthy one overall.”
