New Jersey office market dynamics report, Q2 2026

Office vacancy rates fell to 25% in the Northern and Central New Jersey market during second quarter of 2026, the lowest level since year-end 2022, as tenant demand kept concentrating in newly built or renovated "Premier Class A" buildings. Zero square feet of new construction and a shrinking sublease pipeline are tightening the market further, giving landlords of premium space room to keep pushing rents higher.

• Office tenants completed nearly 1.3 million square feet of transactions in the second quarter, matching the first quarter's volume, led by PNC Bank's 91,915-square-foot renewal at Tower Center 2 in East Brunswick. 
• Year-to-date net absorption reached nearly 1.29 million square feet by mid-year, the fifth straight quarter of positive net absorption and well ahead of the pace set through the same point in 2025. 
• New Jersey's Class A sublease pipeline has fallen from a peak of nearly 7.9 million square feet in mid-2023 to 5.2 million square feet in mid-2026, easing the shadow supply competing with landlords' direct listings. 
• Premier Class A buildings, those built or renovated in the past decade, carried a 13.5% vacancy rate at mid-year, versus 27.1% for the rest of the Class A market, a gap that JLL Research expects to widen given zero new construction.

Flight-to-quality demand will keep shaping the market

Flight-to-quality migration will likely remain the leading theme in Northern and Central New Jersey's office market through the second half of 2026, according to JLL Research. Tenants are expected to continue shedding outdated space in favor of newly constructed or recently renovated buildings with premium amenities. The lack of new construction, combined with that sustained demand, will likely keep pushing vacancy lower and rents higher across the market.

Premier Class A office building supply not keeping up with demand

JLL Research classifies office buildings built or extensively renovated within the past decade as Premier Class A. This segment is absorbing most of the demand behind New Jersey's flight-to-quality real estate trend: at mid-2026, Premier Class A buildings carried a 13.5% vacancy rate, compared with 27.1% for the rest of the Class A market. With no new supply on the way, that gap is likely to keep widening through the second half of the year, per JLL Research.

This report is produced quarterly by JLL Research and covers office real estate market conditions in Northern and Central New Jersey during the second quarter of 2026 (April 1 to June 30, 2026). The full report includes additional analysis about vacancy, leasing activity, asking rents, and sublease trends. 

Download the full PDF below, and explore JLL's U.S. office market dynamics report for the national context behind New Jersey's numbers.

^{Report released July 8, 2026 and authored by Steve Jenco, JLL New Jersey office market research director.}