As of December 2025, we’ve endured a relentless barrage of events: a global pandemic, 9% inflation, Federal funds at their highest level since 2001, port strikes, tariff threats, two active wars, and pockets of civil unrest; yet the U.S. economy keeps humming. GDP is growing at around 3%, unemployment sits at 4.1%, inflation is down to 2.3%, and equity markets keep hitting record highs.
Few sectors illustrate this resilience better than industrial real estate, especially in the warehouse capital of the East Coast: Northern and Central New Jersey.
The COVID boom was historic. E-commerce penetration accelerated five years in five months, companies panic-stocked inventory, and nearshoring became urgent. From 2020-2023, Northern New Jersey absorbed tens of millions of square feet at breakneck speed. Vacancy along the NJ Turnpike and port submarkets fell below 2%, and asking rents soared past $25 NNN in prime locations—levels unthinkable before 2020.
2024 brought the inevitable pause. Higher interest rates choked new supply, companies digested excess inventory, and a noisy election year, plus geopolitical headlines, gave decision-makers an excuse to wait. Net absorption slowed, and concessions (free rent, larger TI packages) returned. For a moment, it felt like the party might be over. It wasn’t.
Starting in late Q2 2025, momentum flipped decisively. In just the past four months, more than 3 million square feet of Class-A space has been leased across Northern New Jersey. That’s not a blip; it’s the beginning of the next sustained wave. Here’s why tenants are moving again:
- E-commerce never stopped growing; Amazon, Walmart, Shein, Temu, and grocery/cold-chain users continue to take big boxes.
- Nearshoring plans studied in 2023-2024 are now being executed, and most new North American production needs East Coast distribution within one day of the Port of New York/New Jersey.
- The October 2024 ILA port strike lasted only three days and delivered a six-year labor deal through 2030, removing a major overhang.
- Tenants are exhausted by waiting for “perfect” conditions. Every quarter of delay means another 10-15% jump in New Jersey property taxes, 20-30% higher insurance, and no relief on construction costs.
Landlords sitting on assets with almost no speculative vacancy are offering attractive incentives such as 4-8 months of free rent and generous TI allowances, while still achieving effective rents in the mid-to-high teens, far above pre-COVID levels. For credit tenants, it’s essentially free money to lock in space now.
The current market snapshot shows vacancies at 4.5-6% overall and sub-3% in port-proximate buildings. Asking rents are $14-$19 NNN-off peak but still 2-3× 2019 levels. Currently, new supply is almost entirely build-to-suit or 90-100% pre-leased.
Looking ahead, 2026 is shaping up to deliver 10-12 million square feet of positive absorption across the region, pushing vacancy back towards 3% and rents another 10-15% higher by 2027. This time, leases are longer (10-15 years) and more disciplined. No more pandemic-era five-year deals with massive expansion options.
The broader lesson is simple: America’s industrial engine does not require calm waters; it just needs the absence of total catastrophe. Trucks still roll down the NJ Turnpike, containers still clear the port, and tenants still sign leases.
Uncertainty is guaranteed. So is the forward march of U.S. industrial real estate.
