PARSIPPANY-TROY HILLS, N.J. (Morris County) — Commercial real estate professionals at Resource Realty of Northern New Jersey say the market is entering a period of stabilization in 2026, with growing demand for smaller, highly functional industrial properties and expanded logistics activity in southern New York.
The brokerage firm reported closing 92 transactions in 2025 totaling nearly 1.8 million square feet. More than 50 of those deals — totaling 1.1 million square feet — were concentrated along the Interstate 80 corridor. Additional activity occurred in Somerset, Essex, Passaic, Warren, Ocean and Bergen counties, as well as southern New York State.
After what the firm described as a robust 2025, principals say the commercial real estate market is recalibrating from the hyper-growth of recent years.
In Northern New Jersey, the large “big box” industrial sector — buildings between 100,000 and 500,000 square feet — experienced slower absorption last year due to a wave of new construction deliveries that have since plateaued. In contrast, properties under 50,000 square feet have emerged as a primary driver of activity.
“Last year the market experienced unquenched demand for spaces under 50,000 SF, with a smaller tenant profile of private regional and/or local companies,” said RRNNJ Founding Principal Tom Consiglio. “These tenants typically provide goods and services to the immediate area, so highway and roadway access remains their highest priority.”
Among notable transactions in 2025 were seven sales totaling more than 300,000 square feet, a 52,606-square-foot lease at 1155 Bloomfield Ave. in Clifton, and four industrial leases along the western I-80 corridor totaling more than 116,000 square feet, including a 45,048-square-foot lease in Hackettstown.
“With land for new construction virtually non-existent in core submarkets, we are seeing a heightened focus on the functional specs of existing inventory – specifically ceiling heights, loading dock ratios and trailer parking,” said Principal Brian Wilson. “In 2026, the small-bay leaders will be those owners who proactively upgrade their legacy assets to meet the sophisticated power and logistical requirements of modern regional distributors.”
The firm said lease renewals accounted for 35% of its lease transactions in 2025.
“As we progress through 2026, vacancy rates in the small-bay sector will continue to tighten up and decrease,” added Principal Greg Sabato, noting that the Urban Land Institute ranks Northern New Jersey among the top 10 markets for projected growth in 2026.
While Northern New Jersey has seen strength in small-bay properties, RRNNJ reported significant expansion in southern New York, highlighted by a 125,000-square-foot FedEx Corp. renewal in Newburgh and its appointment as exclusive leasing agent for the 422,000-square-foot Newburgh South Logistics Center developed by Brookfield Properties.
“Southern New York State has emerged as the new frontier for larger, modern warehouse and distribution space, due in large part to the availability of developable land,” said Principal Scott Peck. “This region is especially attractive because of its superior highway infrastructure and Stewart Airport access, which provides immediate, high-speed connectivity to the entire Northeast corridor. The success of the FedEx renewal and the momentum at Newburgh South Logistics Center are proof that institutional developers and global tenants are still prioritizing these strategic transit hubs for their major operations.”
Based in Morris County, Resource Realty of Northern New Jersey provides brokerage services in sales and leasing, landlord and tenant representation, corporate advisory and investment acquisitions. All of the firm’s principals hold the SIOR designation, a credential recognizing expertise in commercial real estate.
