Commercial real estate brokerage and advisory firm Marcus & Millichap released its Fourth Quarter 2026 Northern New Jersey Office Market Report. The study underscores an ongoing divergence in the regional office sector, where suburban Class B and Class C properties continue to demonstrate resilience despite broader economic headwinds and elevated vacancy rates in premier Class A assets.
According to the report, tenants across Northern New Jersey are increasingly prioritizing cost-effective, well-located office footprint options to manage operational overhead.
“Northern New Jersey’s suburban office market continues to show resilience, especially in Class B and C assets,” Jim McGuckin, managing director and market leader at Marcus & Millichap’s New Jersey office, said. “Many tenants are still prioritizing well-located space with lower occupancy costs, even as the Class A segment faces higher vacancy in parts of the market.”
The report highlights several operational and financial metrics shaping Northern New Jersey’s office landscape through the second half of 2026:
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Suburban Class B/C Stability: Vacancy among Class B and C suburban offices stood at 8.4% as of June 2026—approximately 100 basis points lower than pre-pandemic levels recorded at year-end 2019.
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Tempered Leasing Momentum: Total net absorption for the first half of 2026 reached 330,000 square feet, reflecting a general moderation in leasing velocity over the past 12 months.
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Bifurcated Rent Performance: Rental rate growth remains split by asset class. While recent gains have primarily concentrated in Class A properties, asking rents for Class B and C space have edged slightly lower across most submarkets.
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Employment Headwinds: Regional office demand has been constrained by broader labor contraction. Northern New Jersey lost roughly 13,000 jobs during the initial months of 2026, driven primarily by softness in public sector employment and traditionally office-using corporate sectors.
Commercial real estate transaction volume across Northern New Jersey declined 15% over the 12-month period ending in June 2026. However, institutional capital and private investors continue to identify targeted opportunities.
According to the analysis, private buyers remain consistently focused on established suburban office parks and healthcare-anchored real estate. Medical office buildings—particularly across Bergen County—have recorded steady deal flow, propelled largely by owner-user acquisitions.
“The slowdown in transaction activity has not been uniform across the market,” McGuckin added. “Private investors continue to target established suburban properties, while medical office remains active, particularly in Bergen County, where owner-users have represented a meaningful share of transaction volume.”
