Strengthening demand for modern warehouse and distribution facilities across New Jersey is driving steady occupancy gains, even as older industrial assets account for a growing share of the state’s remaining vacant inventory, according to a new Emerging Trends report released by global real estate services firm Cushman & Wakefield.
The report highlights a significant acceleration in industrial leasing momentum during the third quarter of 2026. Net absorption reached 5.0 million square feet (msf) for the quarter, pushing year-to-date occupancy gains across the state to 9.7 msf.
Much of the leasing velocity has concentrated in premier Class A warehouse and logistics assets. Vacancy within New Jersey’s Class A sector dropped to 8.5% in the third quarter—the lowest level recorded since Q3 2024.
The sharp bifurcation between modern logistics hubs and older commercial space underscores how occupiers are prioritizing energy-efficient, high-clearance distribution facilities near major transportation hubs.
“The headline vacancy rate only tells part of the story,” Felix Soto, Research Manager at Cushman & Wakefield said. “When we look more closely at the data, we see meaningful differences between Class A and older industrial properties. Class A vacancy has continued to decline as recently delivered space is absorbed, while Non-Class A buildings now account for the majority of vacant inventory across New Jersey.”
Between 2022 and 2024, an unprecedented construction boom added nearly 40 msf of new Class A inventory to New Jersey’s industrial landscape. As tenants have progressively leased up this newly delivered modern footprint, older, Non-Class A facilities have increasingly lagged behind.
Non-Class A properties now represent nearly 62% of all available vacant industrial space statewide—marking an increase of roughly 15 percentage points compared to the third quarter of 2024.
“Demand for Class A warehouse space has strengthened, but Non-Class A buildings now make up nearly 62% of what’s available, and that share keeps growing,” Kimberly Bach, Senior Director at Cushman & Wakefield said. “The largest blocks on the market are still led by Class A product, so while we’re seeing positive momentum, certain parts of the market continue to experience elevated vacancy.”
While overall leasing fundamentals point to a resilient industrial recovery across New Jersey’s core distribution submarkets, the findings illustrate a market adjusting at two different speeds. As corporate occupiers absorb newly constructed facilities, landlords of legacy Class A and secondary assets face growing pressure to modernize amenities, upgrade loading infrastructure, or consider strategic adaptive reuse.
