New Jersey’s big-box industrial market is gaining momentum again. After the rush of the pandemic years and the slower period that followed, large tenants are back in the market in a meaningful way. Cushman & Wakefield reported 6.8 million square feet of New Jersey big-box transactions in 2025, including 19 new leases larger than 200,000 square feet. Full-year new leasing reached 28.8 million square feet, the third-highest annual total on record for the state. Further, Cushman & Wakefield reported 9.5 million square feet of new leasing during the first quarter of the year, the second highest total ever over a single quarter.
That activity should not be mistaken for a return to the pandemic-era industrial boom of 2020 through 2022, when tenants rushed to secure space amid surging e-commerce demand and historically tight availability. Today, tenants are active, but also more disciplined. They are studying buildings more closely, underwriting operating costs more carefully and asking a simple question before they commit: will this facility make the business run more smoothly?
For large occupiers, the answer increasingly depends on functionality. Clear height, dock count, trailer parking, car parking, power, HVAC and layout are central to leasing decisions. A warehouse that is attractive on paper or in an aerial photo can fall short if it is unable to support modern racking, automation, material handling systems, electric equipment, employee flow or fast truck movement. Nationally, Cushman & Wakefield noted in its Q1 2026 U.S. industrial report that demand continues to skew toward modern space as occupiers prioritize automation-ready facilities with higher power capacity; the firm also found that large-format leasing remained strong, with more than 40 transactions for 500,000 square feet, or more, for a third consecutive quarter.
This trend is materializing in New Jersey. CBRE’s Q4 2025 Northern and Central New Jersey industrial report found that leasing gains were concentrated in Class A assets, as tenants prioritized modern facilities that offered greater efficiency. Cushman & Wakefield’s New Jersey report also pointed to the strength of Class A demand, noting that Class A space accounted for 12.1 million square feet of new warehouse and distribution leases in 2025, with most of that demand located along Turnpike Corridor submarkets.
The business case is easy to understand. A company may be able to replace several older locations with one Class A facility and come out ahead, even with less total square footage. Better loading can cut truck delays. Higher clear heights can improve storage capacity. Stronger power can support automation and equipment needs. A smarter layout can reduce wasted movement inside the building. Increasingly, users view their buildings as part of the operating platform.
That is also one reason longer leases have more appeal. When a tenant invests in racking, conveyors, robotics, charging infrastructure and other systems, the facility integrates into the fabric of the business. A short-term commitment may not support that level of capital investment. A longer lease, however, allows the tenant to amortize its substantial investments over an extended period.
Supply is currently tighter than the headline availability figures suggest. For a tenant seeking a true big-box footprint, the realistic options narrow quickly. Across New Jersey, only five buildings larger than 1 million square feet are available for lease, either direct or sublease, with three more under construction. Large-scale requirements across the Northeast are increasing, creating competition for the limited number of modern facilities that can meet today’s operating needs. That imbalance helps explain why highly functional big-box space can become scarce even when broader availability appears more flexible.
New supply remains difficult to build. Land is limited. Entitlements take years. Construction and financing costs remain elevated. Power availability has become a more serious constraint, especially for tenants with intensive needs. NAIOP New Jersey highlighted in 2025 that grid congestion and power infrastructure limits are already influencing industrial site selection and development timelines. For big-box users, those constraints can quickly determine which sites are viable and which are not.
Modern Class A buildings with the right infrastructure should continue to attract the deepest demand as large blocks are absorbed. Class B and C properties will eventually benefit as Class A space disappears, however they do face a more complicated path. Some will compete on economics. Others will require capital improvements such as electrical upgrades, improved loading, ESFR sprinklers, better site circulation or, in select cases, more substantial repositioning.
The clearest split in the market is functional quality. Location still carries enormous weight in New Jersey, especially near the port, the Turnpike and dense consumer markets. But location becomes less powerful when a building cannot keep up with how tenants operate. Large occupiers are choosing facilities that help them move faster, reduce friction and support long-term investment. The next phase of big-box leasing in New Jersey will reward buildings that work harder for the companies inside them. The buildings that can support speed, efficiency and commitment will be the ones that lead the market as activity increases in coming months.
Zach McHugh is a principal at Sitex Group
