Despite a leasing slowdown, market fundamentals in the commercial real estate (CRE) market remained strong the the third quarter in the Meadowlands and North Jersey, particularly for premium office space, according to Q3 reports from NAI James E. Hanson and JLL.
General Market and Impact
Both NAI James E. Hanson and JLL reported a slight slow down in lease rate and rise in vacancies in the general Northern and Central New Jersey real estate markets. While asking rents are relatively stable, there’s been a decrease in speculative construction deliveries during Q3.
Despite these market conditions, both companies reported strong demand for Class A properties, with JLL reporting new highs for rents. While the national market is improving with declining vacancy rates, New Jersey’s market is showing its own positive trends in specific sub-regions.
Market Pricing
NAI James E. Hanson reported that average asking rates were down minimally by just 1.0% from the
same period last year, closing at $13.87 per square foot. In addition, the company reported average starting rents to be notably higher in areas such as the Meadowlands at over $17 per square foot and in other areas lower than $14 per square foot.
In contrast, JLL reported an average overall asking rate of $31.45 per square foot with an average asking rate of Class A properties being $34.10 per square foot. JLL reports a 1.5% yearly increase in the average asking rate of Class A properties, suggesting higher demand for such properties.
Vacancy and Absorption
NAI James E. Hanson reported that the overall vacancy rate, which started the year at 26.7%, ended September at 26.3%. This drop followed nine consecutive quarters of rising vacancies.
Over the longer term, less inventory should ultimately lead to a tighter market if there is sustained or increased demand, the report said.
“Through the third quarter 3.5 million square feet was leased, however, absorption remained in negative territory at –1.0 million square feet,” the NAI Hanson report indicated.
JLL reported a vacancy rate of 26.4% in the Northern and Central New Jersey office market, remaining unchanged from mid-year “due to decelerating leasing velocity during Q3” and decelerating tenant demand.
“Less than 86,100 s.f. was absorbed during Q3, compared to more than 1.2 million s.f. of positive net absorption in Q2. Yet, year-to-date absorption reached 389,960 s.f., which outpaced the 192,140 s.f. absorbed during the same period in 2024,” according to the JLL report.
Absorption measures how quickly available properties or units are sold or leased within a specific market over a given period, which in the context of the reports is a 12-month period.
Leasing
NAI James E. Hanson reported a slight decline in leasing activity compared to the same time last year, with 6 million square feet in Q3 of 2025 and 6.2 million square feet in Q3 of 2024. The firm that year-to-date by the end of Q3, they leased close to 22 million square feet.
“Demand for premium and trophy space, driven by a continued flight to quality, has been the main catalyst for leasing activity. Older buildings continue to face challenges as tenants seek high-quality and amenity rich properties,” NAI Hanson reported.
JLL also reported a decline in leasing compared to Q3 of 2024. This year, the global real estate firm leased less than 1.2 million square feet in the Northern and Central New Jersey office market, a 54% decline from the same period one year ago.
More than two-thirds of JLL’s leases above 10,000 square feet were in the 10,000-25,000 square-foot range. The largest lease for JLL during Q3, however, involved NBA’s signing of a 264,970 square-foot short-term renewal at 100 Plaza Dr in Secaucus, New Jersey.
“There were more than 5.2 million s.f. of active tenant space requirements in Q3, compared to 4.6million s.f. one year ago. Furthermore, over 30% of these requirements spanned multiple submarkets, which suggested a strategy of prioritizingthe quality of office product over a specific geography,” the JLL report indicated.
About NAI Hanson
NAI James E. Hanson is a full service commercial real estate firm founded in 1995 and is committed to providing the highest quality commercial real estate services in Northern New Jersey, Southern New York and Eastern Pennsylvania.
Headquartered in Teterboro, New Jersey, the firm has additional offices in Hackensack and Parsippany. Services include brokerage, investment sales, property management, and tenant representation.
NAI Hanson currently employs over 100 people and manages over 11 million square feet. NAI Global has over 375 strategically placed offices throughout the world and leverages local market leadership with global connections.
About JLL
A major international firm, JLL maintains a strong presence in the Northern New Jersey market. The firm has more than 300 offices in over 80 countries and a presence in almost every major city.
“We believe in the power of real estate to shape a better world. Our innovative, intelligent and sustainable approach includes AI-driven solutions that help illuminate a brighter way forward,” according to the JLL website.
The company provides investment management, property management, leasing, and consulting services for various property types. It also leverages technology like its AI platform, JLL Falcon, to provide data-driven insights and enhance performance. JLL is a Fortune 500 company.
