M id A tlantic Real Estate Journal — Commercial Brokerage Directory — July 2025 — 5
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Commercial Brokerage Directory Tenant demand for trophy, amenitized space drives New Jersey office recovery Colliers reports 1.2 MSF of positive absorption, sharp drop in availability rate ARKET SUMMARY Resilient leasing demand and a slow- Office 25Q2 New Jersey | 25Q2 | Office | Market Statistics
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down in new supply additions produced a strong second quarter of 2025 in the New Jersey office market. Despite fewer large transactions, leasing activity was steady at 2.1 million s/f, a 6.3% im- provement from one year ago, as tenants across size seg- ments continued to pursue modern, well-located, ame- nitized spaces. Meanwhile, just two spaces 50,000 s/f and greater became available, compared to seven during the previous quarter. As a result, the availability rate declined from 25.3% to 24.8%, the sharpest quarter-over- quarter decrease in nearly seven years. The market recorded 1.2 million s/f of positive net absorption during the sec- ond quarter. Absorption was positive in 14 out of the 21 submarkets, including Princ- eton and Morristown, which combined for more than half a million s/f of occupancy gains. The single largest new occupancy was the delivery of Sanofi’s new 260,000 s/f headquarters in downtown Morristown. Asking rents continued to edge upwards and now aver- age $31.26/SF. The average class A asking rent is $33.91/ SF and has grown by 2.4% over the past year. Landlords that have made significant capital investments in their buildings are generating the most leasing and seeing the highest levels of rent growth. Availability Rate Sees Sharpest Decline in Seven Years Tenant activity at trophy quality buildings, particu- larly among life sciences and healthcare companies, contributed to declining avail- ability during the second quarter. Consumer health- care company Haleon leased 78,635 s/f at Connell Cor- porate Center, relocating its U.S. headquarters from Warren. In Princeton, Sun Pharmaceuticals purchased a nearly 100,000 s/f building at 750 College Rd. East for occu- pancy following the approval of a $5.2 million tax incentive under the state’s Emerge program. Acadia Pharmaceu- ticals leased 52,771 s/f at 210 Carnegie Center in Princeton, doubling its previous foot-
Net Absorption Quarterly
Net Absorption YTD
Total Inventory SF
Availability Rate
Avail Rate Previous
Vacancy Rate
Leasing Activity Quarterly
Leasing Activity YTD
Avg Asking Rent (Gross)
Submarket
Northern NJ Palisades
6,567,570
18.9%
20.6%
8.4%
116,106
71,534
44,324
138,624
$28.32
Upper Parkway
3,828,891
29.2%
30.3%
22.3%
42,837
(13,061)
90,301
97,047
$24.42
North 17 Corridor
4,275,450
14.4%
14.8%
11.7%
18,736
25,907
2,563
11,751
$27.32
Central Bergen
8,789,703
14.5%
14.9%
11.8%
36,928
85,959
133,960
263,292
$27.32
Route 46/23/3
8,294,444
22.6%
23.8%
18.9%
103,860
63,437
22,296
35,292
$22.55
Hudson Waterfront
21,604,694
32.3%
32.9%
25.0%
134,185
(125,560)
217,023
538,623
$43.92
Meadowlands
5,867,599
27.6%
26.0%
17.4%
(97,093)
(132,569)
46,911
107,639
$28.56
Newark
15,497,293
20.5%
21.3%
14.0%
124,421
299,736
104,114
233,020
$33.57
I-280 Corridor
6,002,877
32.6%
33.1%
27.3%
31,133
90,799
39,685
73,606
$26.31
Parsippany
14,715,276
30.1%
30.7%
26.2%
158,807
169,018
134,184
307,475
$27.42
Morristown
12,565,856
24.0%
24.7%
18.1%
276,551
378,130
137,955
321,472
$29.38
Western Morris
1,171,695
25.5%
25.0%
22.5%
(5,725)
14,442
0
27,793
$23.79
Chatham/ Millburn
1,396,692
29.1%
28.1%
23.5%
(13,006)
(3,490)
0
2,991
$43.00
110,578,040
25.3%
25.9%
19.4% 927,740
924,282
973,316
2,158,625
$33.13
TOTAL
Central NJ Parkway/ Route 22 Corridor
3,212,753
22.2%
22.1%
21.2%
(3,706)
(14,617)
$25.77
19,542
45,171
Metropark
7,673,487
28.7%
29.2%
18.4%
44,016
(55)
$36.20
154,594
256,293
East I-78
21,995,498
24.8%
25.4%
20.7%
130,984
62,628
$30.77
286,746
538,811
West I-78
3,637,003
43.5%
43.0%
39.2%
(17,401)
(19,077)
$24.79
2,385
2,385
South I-287
7,923,274
22.2%
21.8%
17.5%
(34,051)
255,406
$19.15
8,855
89,521
Brunswick’s
3,043,143
8.7%
7.7%
7.8%
(31,748)
(23,489)
$27.36
27,311
64,576
Monmouth County
9,900,520
13.2%
13.3%
10.3%
5,717
23,270
$26.77
246,216
306,411
Princeton
25,661,974
26.4%
27.3%
21.4%
228,246
(72,609)
$28.11
381,339
792,315
83,047,652
24.2%
24.5%
19.5%
322,057
211,457
$28.61
TOTAL
1,126,988
2,095,483
NJ Overall
132,836,290
27.4%
28.0%
21.1%
1,068,598
897,025
1,824,312
3,404,871
$33.91
Class A
53,497,342
20.1%
20.4%
16.6%
149,683
233,324
234,075
773,226
$23.76
Class B
7,292,060
12.3%
12.7%
10.5%
31,516
5,390
41,917
76,011
$18.42
Class C
193,625,692
24.8%
25.3%
19.5% 1,249,797
1,135,739
2,100,304
4,254,108
$31.26
TOTAL
Colliers | New Jersey | 25Q2 | Office Report
these challenges, some proj- ects are advancing, helping to chip away at the market’s oversupply. During the quar- ter, the former Avis Budget headquarters in Parsippany was demolished to make way for a new Life Time Fitness facility and 238 apartments. A nearby building at 7 Campus Drive was acquired for rede- velopment to industrial use. A growing number of properties are being returned to lenders, potentially accelerating the
redevelopment trend. Improving market funda- mentals suggest that a gradual recovery is underway. While hybrid work remains the domi- nant strategy, a growing num- ber of occupiers are formalizing return-to-office policies. At the same time, continued reduc- tions in sublease availability and the removal of obsolete properties for redevelopment are expected to support a more balanced market during the second half of 2025. MAREJ
print. In addition to these new transactions, notable renewals included Sills, Cum- mis & Gross recommitting to 71,157 s/f in Newark and MIAX renewing for 94,445 s/f at in Princeton. Sublease availability de- clined to 6.3 million s/f, mark- ing its lowest level since the fourth quarter of 2020. This reduction was driven in part by Walmart’s sublease of 86,443 s/f at 221 River St. in Hoboken and Michael
Baker International’s 39,653 s/f sublease in Princeton. Additionally, expiring sub- leases converting to direct space have contributed to the trend. The sublease market will likely tighten further, especially for high-quality, plug-and-play options. While redevelopment of ob- solete office inventory across New Jersey continues, prog- ress remains slow due to high construction costs and lengthy entitlement processes. Despite
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