the staff of the Ridgewood blog
Mahwah NJ, the New Jersey warehouse market is undergoing a significant shift, with vacancy rates rising to 9% by the end of 2024—the highest level since Q1 of 2013, according to a January 2025 report by Cushman & Wakefield.
The COVID surge in new supply—13.1 million square feet of mostly vacant warehouse space—is contributing to the increase in vacancies. Meanwhile, economic uncertainty under the new Trump administration is prompting many tenants to opt for short-term leases rather than commit to long-term agreements.
The State of New Jersey’s Warehouse Market
🚨 Key Stats:
✅ 40 million square feet of new warehouse space added between 2022 and 2024
✅ 28 million square feet delivered without a guaranteed tenant
✅ 527 million square feet of warehouse space statewide across 3,034 warehouses
Despite current challenges, experts remain optimistic about leasing activity rebounding in 2025 and 2026.
“Things are looking a little brighter—consumer confidence is up, port activity is up.”
– John Obeid, Senior Research Manager, Cushman & Wakefield
New Warehouse Projects Across North & Central New Jersey
Several major warehouse developments have been completed or are in progress, including:
🏢 Mount Olive: 585,000-square-foot distribution center at the former BASF office complex on Route 80
🏢 Parsippany: New warehouse on a redeveloped office complex
🏢 Elmwood Park: $100 million, 207,000-square-foot warehouse on the Marcal property
🏢 Fair Lawn: Redevelopment of the former Nabisco plant
🏢 Sparta: A proposed warehouse project facing community opposition
🏢 Paterson: GroMex’s $30 million warehouse & supermarket complex near Route 80
Community Pushback on Warehouse Growth
While warehouse development continues to boom, local opposition is growing. Many residents oppose large warehouses due to concerns about traffic congestion, noise, and environmental impact.
Why New Jersey Remains a Prime Location for Warehouses
New Jersey is one of the most attractive warehouse markets in the U.S. due to its proximity to key infrastructure:
📦 Major Ports: Newark & Elizabeth, 4th largest in the U.S.
🚛 Highway Access: Routes 80, 95, and the NJ Turnpike provide one-day reach to major cities
✈️ Airports: Newark Liberty International supports global distribution
COVID-19 & E-Commerce Boom Fueled Warehouse Expansion
The pandemic and rise of online shopping led to an explosion in warehouse construction from 2020 to early 2022. However, the market is now cooling off, returning to pre-COVID levels.
“This is more of a ‘return to normal’ rather than a negative outlook.”
– Dan Kennedy, Former CEO of NAIOP
Tariffs & Economic Uncertainty Could Impact Demand
⚠️ Potential Challenges Ahead:
- 25% tariffs on Mexico & Canada imports
- 10% tariffs on China imports
- Possible decline in port activity, affecting demand for warehouse space
“If imports slow down, demand for warehouse space in New Jersey could drop significantly.”
– Tim Evans, Research Director, New Jersey Future
Shift to Third-Party Logistics (3PLs) Instead of Direct Leases
📉 Warehouse tenants are rethinking their leasing strategies. Instead of committing to long-term leases, many companies are outsourcing storage and distribution to third-party logistics firms (3PLs) to reduce capital investment risks.
“Larger companies are deferring big investments, outsourcing their needs on a short-term basis.”
– David Greek, Managing Partner, Greek Real Estate Partners
The Future of New Jersey’s Warehouse Market
✅ Short-Term Leases: Companies are playing it safe amid economic uncertainty
✅ Potential Leasing Rebound: Experts anticipate 2025–2026 will see higher occupancy rates
✅ Sustainable Growth: A return to pre-COVID warehouse demand rather than an industry downturn
With strong consumer confidence, rising port activity, and strategic location advantages, New Jersey’s warehouse market remains a key player in the U.S. logistics industry—despite short-term challenges.
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