The Northern and Central New Jersey office market is showing significant signs of stabilization as it enters the second quarter of 2026. According to the latest market data from JLL, the regional vacancy rate fell by 80 basis points in Q1, dropping to 25.4%—its lowest level since mid-2022.
This recovery is being driven by a dual-force strategy: a surge in high-end leasing activity and the aggressive removal of nearly two million square feet of obsolete office inventory from the state’s total supply.
Tim Greiner, JLL’s lead office broker in New Jersey, notes that the market is finally finding its footing after a prolonged period of post-pandemic adjustment.
“The headline here is that we’re finally seeing some real traction in New Jersey’s office market as the market corrects itself and obsolete buildings are removed from the inventory,” Greiner said.
The first quarter saw approximately 584,270 square feet of positive net absorption, marking a full year of consecutive growth for the state’s office sector. Notably, 90% of this demand was concentrated in Class A properties, reinforcing a clear “flight to quality” as corporations seek modern, amenity-rich environments to entice employees back to the office.
The Route 24 submarket emerged as the standout performer this quarter, accounting for over 200,000 square feet of Class A absorption. This activity led to a dramatic four-percentage-point drop in vacancy for the Route 24 corridor alone.
Several high-profile corporate relocations underscored the quarter’s success:
- Selective Insurance Company: Signed a major lease for 122,525 square feet at 103 JFK Parkway in Short Hills. The carrier will move its corporate headquarters to this Class A building while maintaining its existing operations in Branchburg.
- Gellert Global Group: The food importer purchased the 146,370-square-foot facility at 2 Giralda Farms in Madison to serve as its new corporate headquarters.
As demand for top-tier space remains persistent, rental rates are beginning to climb. The average asking rent for Class A space in New Jersey reached $34.20 per square foot in early 2026, up from $33.94 a year ago.
However, the real story lies in “Premier Class A” assets—buildings either constructed or significantly renovated within the last decade. These elite properties are commanding a massive premium, with rents nearly 20% higher than the broader Class A market.
The shrinkage of available space is just as important as the new leases being signed.
“For the rest of the year, I don’t expect a dramatic shift. We’ll likely see steady, incremental improvement with vacancy grinding down slowly, rents holding firm or pushing slightly higher at the top end,” Greiner added.
For New Jersey business leaders and landlords, the trend is clear: while the overall market is shrinking in physical size, the value and demand for modern, high-performance office space in strategic corridors like Route 24 are higher than they have been in years.
