For the past decade, New Jersey industrial real estate has been a one-way bet. Vacancy rates hovered near 0%, and rents grew by double digits annually. As we move through 2025, the market is normalizing, but the fundamentals remain incredibly strong.
The "Last Mile" Imperative
E-commerce has shifted the focus from massive regional distribution centers (1M+ sq ft) to smaller, infill locations closer to population centers. These "last mile" facilities are critical for same-day delivery.
The Challenge: These sites are often in dense urban areas with strict zoning, traffic congestion, and high land costs. Repurposing old manufacturing sites or even defunct retail centers is becoming common.
Going Vertical: Multi-Story Industrial
With land prices in the Meadowlands and Port markets reaching astronomical levels, the math for multi-story warehouses finally works. We are seeing the first generation of true multi-story logistics facilities in the outer boroughs of NYC and now creeping into Northern NJ. These projects are complex, requiring massive ramps and heavy floor loads on upper levels.
Cold Storage: The Hottest Sector
The US has a shortage of modern cold storage capacity. Building these facilities is expensive (often 2-3x the cost of dry industrial) due to the insulation, refrigeration systems, and power requirements. However, the premium on rent and the "stickiness" of the tenants make it an attractive niche for experienced developers.
Community Pushback
The biggest headwind for industrial development is not demand—it's local opposition. "Warehouse sprawl" has become a political hot button. Municipalities are rewriting master plans to ban warehouses or impose strict truck routing ordinances. Entitlements that used to take 6 months now take 18+.
Conclusion
The "easy money" in NJ industrial has been made. The next cycle belongs to developers who can navigate complex entitlements for infill sites or deliver specialized product types like cold storage.