In the second quarter, Cushman & Wakefield’s report revealed that Northern and Central New Jersey experienced a thriving industrial leasing market, while office leasing saw a slowdown. The industrial sector witnessed an impressive 11.2% year-over-year increase in new leases, totaling 5.8 million square feet (msf), despite an overall vacancy rate rise to 7.6%. Notably, Class A industrial properties recorded positive net absorption of 1.4 msf, indicating strong demand for high-quality logistics spaces.
On the other hand, office leasing activity was sluggish this quarter with no new leases or renewals exceeding 100,000 sf and a high vacancy rate of 23.2%. Despite significant consolidations and increasing sublease space availability in the market , there is still a preference for premium office spaces.
According to John Obeid , senior research manager at Cushman & Wakefield,”The robustness of the industrial market persists as evidenced by strong leasing activity and notable construction completions.” He further added that although there has been an influx of new space resulting in higher vacancy rates overall,the Class A segment remains resilient with positive net absorption figures – indicative of sustained demand for top-notch logistics properties .
