Teterboro, N.J. – NAI James E. Hanson, the largest New Jersey-based full-service independent commercial real estate firm, has released its 3Q 2026 Industrial Report, showing that net absorption has turned positive after three and a half years in negative territory as steady demand for high-quality space and a slowing construction pipeline bring the market back into balance.
3PL and logistics companies, along with some retailers, continued to lead activity, with demand concentrated along the Turnpike corridor. Year-to-date leasing volume reached 23.7 million square feet, significantly higher than the same period last year, including 27 leases exceeding 200,000 square feet. Renewals also played a major role, with five transactions surpassing 500,000 square feet, led by Amazon’s renewal of more than 1 million square feet at 8003 Industrial Avenue in Carteret, the largest transaction of the year so far.
Overall average asking rents held flat year-over-year, closing the quarter near $14.00 per square foot as higher-priced space was leased and new construction deliveries slowed. Large availabilities in older buildings outside the core submarkets continued to weigh on the overall average, while well-located properties in major areas averaged in the mid-$15.00 to $16.00 per square foot range. Class-A rents closed at $16.04 per square foot, with top-tier properties commanding a premium at $18.00 to $20.00 per square foot. NAI James E. Hanson tracked 21 transactions through the third quarter with starting rents above $20.00 per square foot.
The pace of new construction continued to slow considerably, with 5.1 million square feet delivered through the end of the third quarter, compared to 11.9 million square feet over the same period in 2024. Currently, 10.3 million square feet are under construction, with 6.1 million square feet slated for completion this year. The 2027 pipeline is even lighter, with just 4.1 million square feet expected to deliver.
“After several years in which new supply outpaced the market’s ability to absorb it, Northern New Jersey’s industrial market is continuing to move back into balance,” said James Delmonte, Vice President and Director of Research at NAI James E. Hanson. “Tenants remain active and selective, and they continue to compete for high-quality, well-located space. With far less new construction on the way, we expect continued upward pressure on Class-A rents and an even healthier balance of supply and demand heading into 2027.”
Submarket performance showed demand concentrating in the region’s largest and most established logistics hubs:
- Exits 10/12 posted the lowest vacancy rate among the region’s three largest submarkets at 5.7%, while leading all submarkets with nearly 5.2 million square feet leased year-to-date and close to 1 million square feet of positive net absorption.
- The Ports submarket recorded 6.1% vacancy and more than 3.3 million square feet of leasing year-to-date, with Class-A asking rents averaging $21.25 per square foot.
- The Meadowlands posted more than 820,000 square feet of positive net absorption and 6.6% vacancy.
- Exit 8A recorded nearly 4.5 million square feet of leasing year-to-date, second only to Exits 10/12, with vacancy at 7.2%.
- The Morris Region posted the strongest net absorption in the market at nearly 1.1 million square feet, with another 1.6 million square feet under construction, including a 602,409-square-foot project at 111 Route 10 scheduled for completion in the fourth quarter.
- The Route 46/23/3 Corridor kept vacancy below 6.0% at 5.9%, supported by a limited construction pipeline of just 60,060 square feet.
To download the full 3Q 2026 Industrial Report, visit https://www.naihanson.com/market-reports/.
To stay connected with NAI James E. Hanson and for updates on the latest transactions and news, follow NAI Hanson on Facebook, Instagram, X, and LinkedIn.
