Moderate leasing volume in Q2 2023 despite diverse occupier demand

Leasing activity in the Northern New Jersey office market totaled 1.8 million square feet (msf) in Q2 2023, up 11.3% year-over-year, but down 18.9% from the pre-pandemic (2015-2019) Q2 average of 2.2 msf. Fueled by a robust first quarter, leasing in the first half of the year totaled 4.2 msf, up 12.8% from H1 2022. Large leases are making up for the lack of demand by mid-sized tenants. New Jersey Transit signed the largest lease of the year during Q2, in a 407,137-square-foot relocation to 2 Gateway Center in Newark. Pharmaceutical companies remain active in the market, committing to two of the largest leases signed this quarter and accounted for 24.3% of deal volume 20,000-square feet (sf) and greater. The largest of the two leases was signed by Johnson & Johnson's health spinoff, Kenvue, for 191,448 sf at 80-90 Morris Avenue in Summit.

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