New Jersey’s commercial real estate market closed 2025 on a note of strategic stabilization, according to the Q4 2025 Market Report released Wednesday by Cushman & Wakefield. Despite a cooling period in the final months of the year, the state’s industrial and office sectors showed a remarkable ability to weather economic and geopolitical headwinds.
The industrial sector remains the backbone of the state’s commercial economy. Total warehouse and distribution leasing for 2025 reached 24.7 million square feet (msf). While this represents a slight taper from the historic peaks of 2021, it stands as the third-highest annual total in the state’s history.
Leasing slowed to 4.9 msf in the fourth quarter, pushing the overall vacancy rate to 9.6%. However, the Port Region remains a high-octane engine for growth, accounting for over 4.0 msf of the year’s activity.
“New Jersey’s industrial market continued to demonstrate resilience in 2025, driven by robust tenant demand and strategic submarket activity,” Felix Soto, research manager at Cushman & Wakefield said.
Perhaps most surprising was the office sector, which has faced a “beleaguered” reputation post-pandemic. The market recorded 758,475 square feet of positive net absorption for the year—a key indicator that companies are once again expanding their physical footprints.
The “Flight to Quality” remains the dominant trend. In Q4, Class A office spaces—buildings featuring modern amenities, sustainable infrastructure, and transit connectivity—captured 60.3% of all tenant demand.
| Market Metric | Q4 2025 Value | Trend |
| Office Vacancy Rate | 21.9% | Stabilizing |
| Q4 Office Leasing | 1.3 msf | Steady |
| Class A Demand Share | 60.3% | Dominant |
As the state enters 2026, the data suggests a market that is “finding its footing.” While older office stock (Class B and C) continues to struggle with high vacancies, the concentration of demand in premier assets is creating a bifurcated market where high-quality properties are effectively insulated from broader downturns.
“The New Jersey office market is finding its footing, with Class A spaces leading the way in attracting tenants,” noted Bill Simoneau, senior research manager at Cushman & Wakefield.
