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Tri-State Industrial Corridor Shows Resilience in First Half of 2025 Amid Market Adjustments

Gretchen Shoenberger • 9/3/2025

NEW YORK – SEPTEMBER 3, 2025 – The New York, New Jersey, and Pennsylvania (Tri-State) industrial corridor demonstrated notable resilience in the first half of 2025, navigating market headwinds with stable rental rates and continued confidence in the region’s long-term potential, according to a new report from Cushman & Wakefield. The H1 2025 Tri-State Industrial Report details how the market is adjusting to pre-pandemic demand levels while still showing signs of strength, driven by robust port activity and a dense, affluent consumer base. 

The report finds that while the overall vacancy rate for the 1.5 billion-square-foot corridor rose to 8.7%, the market is showing signs of normalization rather than decline. Leasing activity reached 26.9 million square feet in the first half of the year, a pace set to surpass 2023 totals. This activity was largely driven by demand from third-party logistics (3PL) providers, food and beverage companies, and retailers. 

“Despite headwinds in the current environment, the Tri-State industrial market remains among the strongest in the nation,” said Dimitri Mastrogiannis, Senior Research Analyst at Cushman & Wakefield. “Our region’s adaptability and ongoing demand for prime logistics locations continue to drive positive long-term momentum, positioning the corridor for sustained performance and future growth.” 

A key driver of the region's stability is the sustained performance of the Port of NY/NJ, the busiest port on the East Coast. The port’s volume in H1 2025 was up 4.9% from the previous year, underscoring its critical role as a gateway for goods servicing the 60 million people who reside within a five-hour drive. This consistent activity continues to fuel demand for industrial space across the corridor. 

Construction shows new completions slowed to 14.8 million square feet in H1 2025. However, a wave of new speculative and build-to-suit projects has broken ground, particularly in the PA I-81/I-78 corridor. 

“Construction trends reflect a market in transition,” added Felix Soto, Research Manager at Cushman & Wakefield.  “This activity signals continued developer confidence, though it will test the market's ability to absorb new supply in the coming months.”  

Looking ahead, Cushman & Wakefield forecasts steady growth for the region through 2026 and 2027. Despite a short-term rise in vacancy, demand is expected to rebound, supporting occupancy growth. The PA I-81 & I-78 Corridor is projected to lead rent increases, with gains of 3.0% in 2026 and 4.0% in 2027, positioning the entire Tri-State corridor for sustained long-term performance. 

Explore the full report.

About Cushman & Wakefield
Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in nearly 400 offices and 60 countries. In 2024, the firm reported revenue of $9.4 billion across its core service lines of Services, Leasing, Capital markets, and Valuation and other. Built around the belief that Better never settles, the firm receives numerous industry and business accolades for its award-winning culture.  For additional information, visit www.cushmanwakefield.com.

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