- New Jersey industrial deliveries fell 58% year over year in Q3, and net absorption in northern and central New Jersey hit 3.2 million square feet, according to Newmark data cited by Bisnow.
- Year-to-date leasing of 7.4 million square feet is more than all of last year, and tenants are searching for around 80 million square feet, executives told Bisnow’s conference.
- Scarcity favors existing owners, but high rates, entitlement risk and lender pressure to lease up mean rent growth is likely to trail occupancy gains.
Existing New Jersey industrial landlords are gaining leverage as new supply dries up, according to Bisnow, though rents may not follow right away.
New supply is thinning fast: Newmark’s Q3 report shows deliveries off 58% from a year ago.
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Demand Still Strong
Newmark figures show 3.2M SF of net absorption across the northern and central submarkets in Q3, according to Bisnow. Leasing so far this year reached 7.4M SF. That figure has already doubled 2025’s full-year total, pointing to the strongest year since 2022.
At Bisnow’s October industrial conference, Stonemont Financial Group’s Brian Danahy put tenant requirements near 80M SF. If all that space were leased, he said, vacancy would approach zero.
Big Blocks Run Short
Warehub’s James Holbrook said requirements of 400K SF or more get snapped up quickly. Meanwhile, Turnbridge Equities’ Ryan Nelson noted that only five buildings are under construction for delivery in the next year. As a result, large blocks of available space could become even harder to find.
Our brief on shrinking construction pipelines showed the same pattern nationally. Industrial pipelines are down by half or more from their peaks, according to Marcus & Millichap.
Entitlement Risk
Municipalities across the state have amended zoning rules and capped warehouse sizes after local protests, Bisnow reported. Prologis’ Mikki Columbus said some entitled parcels may soon fall short of their approved sizes.
That scarcity makes approved land valuable. Kurv Industrial’s Stefan Sansone called an approved site “irreplaceable” in many towns.
Rates, Not Regulation, Bite
Nelson said interest rates remain the main obstacle. Costs are rising, while sellers hesitate because cap rates may expand. He urged attendees to watch the 10-year Treasury. We have also covered PIMCO’s warning that the 10-year yield could reach 6%.
Saxum Real Estate’s Anthony Rinaldi said lenders often prefer owners to fill space rather than push rents. Empty space, he explained, weighs on returns.
Why It Matters
JLL’s Jim Cadranell said scarcity gives owners access to new three-year loans while they lease up. Cushman & Wakefield’s Helen Paul added that the market is only a couple of deals away from an inventory crunch. However, rent growth will lag.
What’s Next
Watch whether the thin construction pipeline and 80M SF of tenant demand finally push rents higher. For now, lender caution may keep owners focused on occupancy.
