New Jersey's office vacancy has ticked up by 40 basis points 27 percent in the first quarter compared with the previous three months, a market report from JLL finds. That comes after the category declined in the second half of 2024.
The Chicago-based firm attributed the negative trend to corporate relocations.
"Relocations by companies including Samsung Electronics and Bank of America resulted in large blocks of office space recently being placed on the market," JLL explained.
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Particularly, Samsungs' former headquarters in Ridgefield Park was marketed for lease in the first quarter. That represented 233,505 square feet. Also, Bank of America is vacating nearly 329,000 square feet in Jersey City.
Negative net absorption hit 929,800 square feet. That's the highest level in minus territory seen since the second quarter of 2023. Over 80 percent of the negative absorption involved Class A industrial assets in the first quarter, according to JLL.
Leasing wasn't much better; volume was down by 20 percent to 1.9 million square feet.
"Nearly 60% of Q1 leases were in the 10,000-25,000-s.f. range, as larger sized transactions remained elusive," JLL wrote.
Rents averaged $33.94 per square foot. The priciest were in Metropark, at $38.81, and the lowest in Hunterdon, at $20.40.
Going forward, JLL said that redevelopment or conversions of outdated office buildings will "remain a major theme" in New Jersey. This is something that's been universally known to drive down vacancies in the office sector.
"Demand for industrial space, multi-housing units, medical and life sciences facilities has fostered the demolition of such buildings to alternative uses," the report said.
"More than 8.5 million s.f. were removed from the office inventory base during the past five years, including 2 million s.f. in 2025."
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