New Jersey industrial real estate market report

Average Class A NNN asking rates continued to pull back from the highs seen in 2024-2025. Developers of new product hold the line with asking rents near the $20 net mark for buildings close to the Port and for higher image office redevelopment projects. There were 3 deals signed in 1Q26 on new construction spaces in the $21-23 net range. Average annual rent escalations are between 3.0-3.5%.

Leasing activity to kick off 2026 was nearly 600,000 sf or 8.5% stronger than 1Q25 however activity was seasonally slower than 4Q25 by about 1.3 msf. The largest two deals signed in the quarter were both renewals.  The most active submarket was the Central Turnpike which posted 1.7 msf of new leases.  Also of note, there were 13 new leases in the Meadowlands which accounted for 750,000 sf. The average lease term in the market is about 80 months.

There are 39 projects in the ground totaling 8.7 msf which comes on the heels of 56 projects and 10.7 msf delivered in 2025.  Greater Morris County is the most active submarket in terms of projects with 10 buildings underway totaling 1.3 msf.  The Central Turnpike Corridor is seeing the most supply with 5 buildings or 1.8 msf underway with the market’s two largest speculative buildings at the Central 9 Logistics Park. The average building currently under construction is sized around 220,000 sf which aligns well with demand for capturing either one or two tenants.