Industrial vacancy in northern New Jersey saw a rise during the fourth quarter, continuing the trend from earlier in the year as new construction added pressure to the market. A report from NAI James E. Hanson reveals that overall vacancy reached 6% by the end of 2024, up from 4.7% in 2023, due to the completion of nearly 12 million square feet of new industrial space. Notably, 9.5 million square feet of that space was delivered vacant, exacerbating the vacancy rate.

“The New Jersey industrial market continued to be impacted by sustained deliveries of new product throughout 2024,” the report states. “Available space in new construction has kept absorption in negative territory over the last seven quarters. In addition to offerings from new construction, the amount of sublease space rose throughout the year, reaching a historical high.”

Despite this, the report highlights that demand from logistics and distribution firms has mitigated the vacancy increase. Looking forward, it suggests that the level of new deliveries could sharply decrease after 2025, potentially offering relief to the market. However, factors such as tariffs and supply chain disruptions could continue to impact the market in the short term.

The report also noted that asking rents have remained stable across most northern New Jersey submarkets, including the Meadowlands and Port Newark-Elizabeth regions, with average asking rates of $16.01 and $15.98 per square foot, respectively. Tenants leased approximately 949,000 square feet in Q4, contributing to a total of 9 million square feet leased in 2024. The state’s largest industrial deals included LeCangs’ 845,280-square-foot lease in Burlington Township and eLogistek’s 806,000-square-foot commitment in Mansfield.