Firm Principals Forecast Shift Toward Asset Functionality and Small-Bay Industrial for 2026
PARSIPPANY, NJ (February 23, 2026) – With the calendar already reading the middle of Q1 2026, the brokerage professionals at Resource Realty of Northern New Jersey (RRNNJ) report a significant recalibration in commercial real estate markets across Northern New Jersey and Southern New York State.
Following a robust 2025, in which RRNNJ closed 92 transactions totaling nearly 1.8 million square feet, the market has shifted from the hyper-growth phase of previous years toward a period of stabilization. The firm’s activity was heavily concentrated along the I-80 corridor, with over 50 deals totaling 1.1 million square feet, which accounted for the bulk of the year’s volume. RRNNJ also recorded significant activity across Somerset, Essex, Passaic, Warren, Ocean and Bergen counties, as well as Southern New York State.
Industrial Market: Small-Bay Resilience vs. Big-Box Surplus
While the “big box” industrial sector (100,000 – 500,000 square feet) saw slower absorption across Northern New Jersey in 2025, due to an influx of new deliveries that have now plateaued, the sub-50,000-square-foot market has become 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.”
The 2025 deal cycle mirrored this shift toward high-utility assets. Notable mid-sized activity included:
- Seven sales totaling over 300,000 square feet
- A 52,606-square-foot lease at 1155 Bloomfield Ave. in Clifton, NJ
- A late-year surge along the western I-80 corridor, featuring four industrial leases totaling over 116,000 square feet, including a 45,048-square-foot commitment 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.”
Another trend mirroring the previous year is that RRNNJ-arranged renewals accounted for 35 percent of all lease transactions. “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 ULI now ranks Northern New Jersey among the Top-10 markets for prospect growth in 2026.
Southern New York: The New Frontier for Modern Logistics
Countering the small-bay industrial trend in Northern New Jersey, RRNNJ’s footprint in Southern New York grew significantly in 2025, anchored by two major milestones in Newburgh: a 125,000-square-foot FedEx Corp. renewal at 100 Enterprise Drive and the firm’s appointment as the exclusive leasing agent for the Newburgh South Logistics Center, a 422,000-square-foot speculative distribution 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,” noted 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, N.J., RRNNJ’s brokerage professionals deliver commercial real estate solutions in sales and leasing, landlord and tenant representation, corporate advisory and consulting, and investment property acquisitions. Each of the firm’s principals has achieved the SIOR designation, providing clients with local knowledge and market intelligence locally, regionally, nationally and globally.
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