Northern New Jersey Industrial Market Report

Rising fuel costs reinforce close-in industrial space. Leasing across both small- and large-bay space is shifting toward infill logistics nodes as last-mile and distribution tenants favor locations with better access to consumers and strong transportation infrastructure. Large-bay demand has been especially concentrated along the New Jersey Turnpike, with users targeting modern facilities near Newark Liberty International Airport and the Meadowlands corridor, helping keep vacancy below 7 percent in Bergen and Essex counties as of March. In contrast, move-outs in older nodes in Hudson and Union counties, including Bayonne, pushed vacancy to around 8 percent. At the same time, weaker manufacturing demand and softer leasing in peripheral areas also left new space unfilled in Morris County, lifting vacancy near 10 percent. A manufacturing tax credit program launched in late 2025 could support longer-term factory demand. However, near-term leasing is likely to remain centered on infill distribution space, especially as higher gas prices encourage tenants to reduce transportation costs.