16A — October 2025 — Southern New Jersey — M id A tlantic Real Estate Journal
www.marej.com
S outhern N ew J ersey WCRE 3rd Quarter 2025 Report
Market recalibration strengthens as fundamentals steady across key sectors
W
olf Commercial Real Estate (WCRE) has released its
balance and resilience are emerging. Leasing volumes have normalized, investors are targeting well-positioned as- sets, and limited new construc- tion is helping many submar- kets stabilize after two years of repricing and adjustment. “Across all three (NJ/PA/ NY) regions, we’re seeing a market defined by resilience and recalibration,” said Jason Wolf , managing principal and founder of WCRE. “Leasing volumes have normalized, investors are targeting well- positioned assets, and limited new construction is helping
many markets find their foot - ing heading into 2026.” Regional Market Highlights Southern New Jersey’s commercial real estate mar- ket demonstrated steady performance through the third quarter of 2025, led by con- tinued strength in the indus- trial and medical office sec- tors. Leasing and investment activity remained resilient across key submarkets such as Cherry Hill, Mount Laurel, and Marlton, where proxim- ity to major transportation corridors continues to attract regional tenants. Meanwhile,
redevelopment momentum ac- celerated, with several legacy retail and office properties be - ing repositioned for multi- family or mixed-use projects, reflecting the market’s broader shift toward diversification and long-term stability. Philadelphia’s commer- cial market showed mixed performance in Q3 2025. The industrial sector saw vacancy rise to 9.5% as 12 million s/f of new supply met contracting demand, though Burlington County continued to outper- form with over 3 million s/f of positive absorption. The office
market experienced a modest pullback, with -990,000 s/f of negative net absorption amid continued tenant downsizing, though strong commitments from firms like FS Investments and Kirkland & Ellis reflected long-term confidence. Retail performance remained stable despite national closures, with experiential retail and food & beverage operators driving new leasing. Northern New Jersey maintained its reputation as one of the nation’s premier industrial hubs, with healthy leasing activity along the Turn- pike corridor and increasing tenant preference for mid-sized distribution centers. The office market continued to adapt to hybrid workplace models, while retail assets in prime suburban corridors benefited from resilient consumer spend- ing and limited new construc- tion, sustaining stable rent growth across the region. New York’s recovery pro- gressed unevenly across asset types. Retail leasing in prime corridors such as SoHo and the Upper East Side rebounded strongly, bolstered by luxury and flagship tenants return- ing to Manhattan. The office sector saw renewed interest in high-quality class A properties as tenants prioritized modern, amenity-rich environments. Meanwhile, industrial demand in outer boroughs like Brooklyn and Queens remained strong, driven by last-mile logistics and e-commerce operators seeking proximity to the urban core. Key Market Takeaways: • Southern New Jersey: Industrial and medical office properties lead in driving demand while redevelopment of older retail and office as - sets into multifamily and mixed-use projects continued to shape the region’s evolving investment landscape. • Philadelphia: Office de - mand contracted by nearly 1 million s/f year-to-date, but the metro maintains one of the lowest national availability rates at 14.3%. Retail remains tight with a 5.1% availability rate and strong small-shop leasing activity. • Northern NJ: Industrial fundamentals remain among the strongest nationally, sup- ported by low vacancy and minimal new deliveries. Office absorption improved mod- estly as suburban submarkets continued on page 20A
Q3 2025 Re- gional Mar- ket Report, covering the Southe rn New Jersey, Phi l ade l - phia, North- ern New Jersey, and New York Metro commercial real estate markets. As the market continues to adapt to changing economic dynamics, signs of renewed Jason Wolf
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