BRC 2025 Year End Review

Northern & Central New Jersey Industrial Market

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The Northern and Central New Jersey industrial real estate market demonstrated
meaningful signs of stabilization and renewed strength in 2025 following several years of
softening conditions. After an extended period of post-pandemic hyper-growth and
unprecedented speculative development, the market has transitioned into a more balanced
and sustainable phase. This market adjustment reflects a healthier alignment between
supply and demand, as new deliveries moderated and tenant decision-making normalized
amid broader economic uncertainty. Despite lingering macroeconomic headwinds, the
region’s core fundamentals, driven by its strategic port access, dense consumer base, and
critical logistics infrastructure, remain intact.

Leasing activity improved year-over-year, underscoring sustained occupier demand across
key port-adjacent submarkets. More than 28 million square feet of industrial space was
leased throughout Northern and Central New Jersey in 2025, surpassing the approximately
24 million square feet recorded in 2024. This increase occurred despite cautious corporate
expansion strategies and elevated financing costs, highlighting the market’s resiliency
relative to other major U.S. logistics hubs. Institutional-grade assets, particularly those
offering modern clear heights, trailer parking, and proximity to Port Newark–Elizabeth,
continued to outperform.

Rental rates remained firm across most submarkets, with asking rents ranging from
approximately $9.00 to $18.00 per square foot as of the fourth quarter of 2025. Properties
closest to the ports and major transportation corridors continued to command premium
pricing. As sublease availability declined and tenant demand improved in select corridors,
several submarkets experienced rent stabilization or modest growth during the second half
of the year. Market participants generally report increased confidence in pricing durability
for well-located, functional assets.

Supply-side pressures eased notably in 2025. New construction deliveries slowed to
approximately 9.9 million square feet for the year, a significant reduction from prior peak
levels. As a result, the regional industrial availability rate remained relatively stable, holding
between 6.0% and 6.5% year-over-year. This stabilization reflects a market approaching
equilibrium, particularly as speculative development pipelines continue to thin.

Net absorption remained modestly negative at approximately 750,000 square feet as of
year-end 2025; however, this represents an improvement from the roughly 1.0 million square
feet of negative absorption recorded in 2024. The deceleration in negative absorption
suggests that demand is gradually catching up to the elevated inventory introduced during
the prior expansion cycle.

Looking ahead, industry consensus among peer firms and regional economic agencies
suggests that Northern and Central New Jersey is well-positioned for continued
normalization in 2026. Limited new supply, persistent infrastructure advantages, and steady
consumer-driven logistics demand are expected to support long-term market stability and
selective growth opportunities.