New Jersey – July 9, 2025 – Cushman & Wakefield announced today that the real estate services firm has released its Q2 2025 New Jersey Market Report, highlighting robust performance across both the industrial and office sectors. Leasing activity showed positive trends in specific submarkets, and demand for Class A properties drove key metrics for both sectors despite ongoing challenges. The industrial market in New Jersey experienced increased leasing momentum in Q2 2025, with activity totaling 5.7 million square feet (msf), a 4.7% rise from the previous quarter. The Port South and Meadowlands submarkets led the way, accounting for 33.9% of leasing activity. Year-to-date leasing in the Port South submarket improved 22.0% year-over-year (YOY) to reach 2.3 msf.
While overall net absorption remained negative for the ninth consecutive quarter (-1.9 msf), Class A industrial properties saw positive absorption, driven by consistent tenant demand despite increasing sublease availability. Vacancy surged 220 basis points YOY to 9.9%, influenced by 13.1 msf of new vacancies. Pre-leasing activity also declined to 28.4% as only 15.4% of newly delivered projects were occupied upon completion.
“New Jersey’s industrial market remains resilient despite ongoing challenges,” said Felix Soto, Senior Research Analyst at Cushman & Wakefield. “Submarkets such as Port South and the Meadowlands continue to see robust leasing activity, highlighting their strategic value and appeal for modern warehouse and distribution spaces.”
New Jersey’s office market demonstrated signs of stabilization midway through 2025, driven by steady demand for the third consecutive quarter. Net absorption turned positive in Q2, led by occupancy gains within Class A office space. The office vacancy rate saw a slight improvement, falling 40 basis points YOY to 22.2%, with conversions and demolitions helping offset vacancy growth.
New leasing activity held strong at 1.8 msf in Q2, surpassing the two-year quarterly average, with 67.6% of demand focused on Class A office spaces. Asking rents for Class A properties saw a 3.3% YOY increase to $36.40 per square foot, while the overall market average declined by 0.6% from the previous quarter to $32.45 psf.
“As we reach the midpoint of 2025, the New Jersey office market is finding balance,” Soto added. “Sustained demand for Class A office environments and strategic adaptations, like conversions, are keeping the market competitive and attractive for tenants looking for premium spaces.”