A Rebound in Q3 Industrial and Office Leasing Activity

On Oct 4, 2024

Cushman & Wakefield has released its third quarter industrial and office statistics for Northern and Central New Jersey, reporting a rebound in activity in both sectors. Industrial leasing activity surged to its highest quarterly total since Q1 2022, while the office market experienced a notable recovery from a sluggish second quarter.

“The industrial sector in New Jersey has seen a robust recovery in Q3, driven by a 53.7% increase in new leasing activity compared to last year,” said John Obeid, senior research manager. “Despite [recent] port disruptions, the demand in key submarkets, particularly the Meadowlands, Exit 8A and Port South, underscores the resilience of New Jersey’s industrial market.”

In the industrial sector, new leasing activity reached 7.2 million square feet (msf), with the Meadowlands, Exit 8A and Port South submarkets accounting for 47.5% of the demand. The vacancy rate in the Port South submarket improved to 14.6%, bolstered by two significant leases totaling over 617,610 square feet at the Linden Logistics Center. However, potential continued port disruptions could affect tenant confidence if labor negotiations remain unresolved.

“The rebound in office leasing is encouraging, but it is tempered by ongoing tenant consolidations and downsizing,” added Obeid. “Major relocations have been pivotal in driving demand, yet overall year-to-date leasing is slightly down compared to 2023, highlighting a cautious but optimistic market outlook.”

Meanwhile, the office demolition and re-use trend persisted. Recent projects included the transformation of 2 King Arthur Court in North Brunswick into industrial use and the planned redevelopment of Princeton Pike Office Park in Lawrence Township. The three buildings at 3131 Princeton Pike are set to be demolished, making way for 204 apartments and 17,000 square feet of retail and dining space.

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