Northern and Central New Jersey’s office market continued to tighten through mid‑2026 as vacancy retreated from its mid‑2024 peak, according to JLL’s New Jersey Office Q2 Report.
After exceeding 27%, the overall vacancy rate fell to 25.4% in early 2026 and to 25.0% by mid‑year, supported by faster leasing velocity, shrinking sublease availability, and the removal of obsolete buildings from the inventory.
Net absorption reached 704,150 square feet in Q2 2026, marking the fifth straight quarter of positive demand and pushing year‑to‑date absorption above 1.2 million square feet, far surpassing the 303,870 square feet absorbed during the first half of 2025.
Transaction volume remained steady, with nearly 1.3 million square feet leased in Q2—similar to Q1—and activity continued to skew toward smaller deals. Among leases over 10,000 square feet, nearly 60% fell within the 10,000–25,000-square-foot range, reinforcing a long-running trend toward modestly sized requirements. The largest Q2 transaction was PNC Bank’s 91,915‑square-foot renewal at Tower Center 2 in East Brunswick.
“New Jersey’s office market continues to build momentum,” Tim Greiner, executive managing director and Leasing Advisory lead for JLL in New Jersey, said.
“Companies are still being selective about where they lease, but they’re making decisions, and that’s translating into lower vacancy, steady rent growth, and another quarter of positive absorption. As we move through the rest of the year, we expect demand for well-located, high-quality buildings to remain strong, while the limited development pipeline should continue to tighten market conditions.”
The sublease pipeline continued to stabilize as high-quality blocks were leased, others shifted to direct availability, and some tenants withdrew listings. Class A sublease space, which had surged to 7.9 million square feet in mid-2023 due to consolidations, declined to 5.2 million square feet by mid‑2026.
Looking ahead, flight-to-quality will remain the defining theme of the second half of 2026 as tenants shed outdated workplaces and migrate into newly built or recently renovated buildings with premium amenities.
“Premier Class A” assets—those built or significantly renovated within the past decade—posted a 13.5% direct vacancy rate, dramatically lower than the 27.1% vacancy rate across the remainder of the Class A market, underscoring the widening performance gap between modern and legacy inventory.
