6A — January 2026 — 2026 Forecast — M id A tlantic Real Estate Journal
www.marej.com
2026 F orecast By Jon Moore, Woodmont Properties
2026 Commercial Real Estate Outlook: New Jersey & Eastern Pennsylvania
T
he New Jersey–East- ern Pennsylvania cor- ridor is set for solid
demand. With unemployment hovering around 4%, consumer confidence remains a primary driver of rental demand. We should keep an eye on young professionals impacted by AI’s commercial adoption. Multifamily: Demand Outpaces Supply The multifamily sector re- mains tight, with net absorp- tion forecast at 24,200 units and average rents climbing 3% to $2,560. Vacancy is expected to dip to 5.0%—a five-year low—while core-plus cap rates compress into the 4.5% range. Two primary forces define this market:
• Transit-Oriented Develop - ment (TOD): The operational “Gateway Revitalization” plan has fueled development around Newark, Hoboken, and the ex- tended PATCO line. Developers are concentrating nearly half of new starts within a half-mile of rail stations to capture premi- ums for walkability. • Policy & Incentives: While state policies limit volume in high-impact zones to protect open space, new “Workforce- Housing” bonds and tax credits offset a third of construction costs for mid-scale projects. Fourth round COAH require - ments have driven a rush of
supply, but demand should meet or exceed the same. This attracts institutional capital to the Lehigh Valley and New Jersey, addressing a critical need for the region’s expand- ing middle class and affordable housing (lowercase ‘a’) which apartments provide relative to for-sale housing. Keep an eye on municipal budgets and real estate taxes; PILOTs are im- portant to make projects pencil. Industrial: A Logistics Powerhouse Industrial real estate re- mains a premier asset class. Deliveries are expected to reach 20.5 million square feet, yet vacancy will slip to 4.4% as average asking rents rise north of $15 psf. Regional infrastructure in- vestments (totaling $2-3 bil- lion) along I-95, I-78, and I-81 have sharpened last-mile con- nectivity. Demand for “last- mile” parcels (30–50k s/f) is expected to rise 9%. Capital & Financing Lending is back with tighter spreads, and equity is com - ing back to development after a few years given 2021-2023 cost inflation and national supply concerns. Benchmark rates remain stable, with the Fed easing around the edges. Institutional investors are pri- oritizing the region given its high barrier to entry status, earmarking 60-70% of new capital for industrial assets and multifamily assets. Strategic Takeaways To capitalize on these funda - mentals, stakeholders should: • Focus on TOD and sub - urban apartments: Prioritize multifamily projects near rail hubs or suburban locations given remote workers and the impending full self-driving cars (no more stressful commutes from the burbs). • Target Logistics Corri - dors: Secure industrial par- cels with direct access to I-95/I-81, Rt. 78 or the Port of Newark-Elizabeth. In summary, 2026 offers a favorable risk-adjusted re- turn environment. Steady job growth and strategic infra- structure will keep vacancy low and rents rising for savvy investors in the NJ-PA corridor. Jon Moore is CIO at Wood- mont Properties, overseeing investments, capital mar - kets, and growth strategies, bringing 30+ years of real estate development leader- ship experience. MAREJ
Economic & Demographic Foundations Regional GDP growth is pro- jected between 2-3%, outpacing many national average fore- casts due to thriving health- care, advanced manufacturing, and financial service sectors. Demographic trends support this optimism: the region added 230,000 households between 2022 and 2025—primarily young professionals and dual- income families seeking a bal- ance between urban proximity and suburban affordability. New York City’s lack of afford- ability and fluctuating social legislative policies creates NJ
expansion in 2026, driven by steady economi c g r o w t h , population influx, and a dominant logistics network .
Forecasts indicate persis- tent demand for housing and warehouse space, with supply constraints keeping vacancies low and rents on an upward trajectory. Jon Moore
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