Building Tomorrow
The year ahead looks promising for the commercial real estate industry in South Jersey, continuing the sector’s trend of growth and stability established in recent years. While economic uncertainty is tempering the region’s business outlook for the new year, real estate and technical experts agree this uncertainty does not spill over into what’s anticipated for commercial real estate in 2026.
“Demand for industrial real estate is driving sale and acquisition activity. Users are taking on ownership of buildings across all asset classes, specifically office and industrial due to institutional capital having sat on the sidelines in recent time,” says Andrew Koller, research analyst and advisor for Wolf Commercial Real Estate and Corporate Facility Advisors International.
South Jersey is positioned—both figuratively and literally—for a year of continued growth in commercial real estate, and local experts were keen to share their thoughts as to why that is, along with the specifics on what to expect.
Industries driving the market
Many in the field agree there are a number of industries driving commercial real estate growth throughout the South Jersey region, from industrial and logistic sectors to health care and education.
“The health care industry is one commercial sector which continues to drive our real estate market. Many of these companies are spending ‘top dollar’ for state-of-the-art medical space. And it’s not just the big hospitals, we are seeing more medical/dental practices go [out] on their own or start a private medical group,” says Chris Benstead, realtor with Berkshire Hathaway Fox & Roach.
Robert Powell, CCIM, vice president of business development and marketing at Vineland Construction Co., sees the rapid expansion of AI across the country creating “an unprecedented demand for data centers.”
“These high-power facilities require specialized infrastructure to provide them with the power, cooling and connectivity needed for their operations,” Powell says.
Scott Mertz, president of NAI Mertz, agrees data centers that provide the backbone of AI operations are “certainly the buzz in commercial real estate circles,” but he hasn’t seen that become a driving force yet in South Jersey.
“That’s largely due to the difficulty in sourcing the energy required to meet the power needs of these massive facilities, as well as resident pushback on proposed developments due to concerns over power usage and water consumption,” Mertz says.
While AI is certainly a driving force, Powell says it’s just one piece of the puzzle helping impact the marketplace’s future.
“E-commerce and logistics continue to be major drivers for the commercial real estate market along with manufacturing, driven by reshoring and supply chain resilience,” he says. “All of these industries utilize flex and industrial spaces for their operations, which can be controversial for development, but they are the current economic engines creating jobs and rateables for communities.”
William C. Sproule, executive secretary-treasurer of Eastern Atlantic States Regional Council of Carpenters, says many of these industries supporting commercial real estate throughout the region rely on union carpenters to perform a “significant share of the work,” such as in logistics, health care, education and advanced manufacturing.
“From large-scale distribution centers to hospitals and research facilities, these projects need precision, safety and long-term durability. Union carpenters are highly-trained and bring the experience needed to meet those standards, which is why developers continue to rely on them for complex commercial builds,” Sproule says. “As these industries continue to expand, they translate directly into family-sustaining union jobs and continued investment in skilled local labor.”
Updating and upgrades
Quality construction, upgraded materials and modern amenities have all long been trends in the commercial real estate sector—and all should continue to be in 2026.
“Commercial clients seek durable, cost-effective materials that meet high standards for quality and safety. Building occupants, the public and first responders expect structures that are safe, resilient and visually appealing—constructed correctly, on schedule and by trained local professionals,” Amy Hennessey, executive director of Employing Bricklayers Association (EBA), explains.
Hennessey adds that masonry materials afford unique and beautiful building designs with various color, texture and size options, and can benefit commercial clients by increasing property value while saving money on repairs and rebuilding.
“Masonry construction enhances long-term property value through durability, fire-resistance and reduced risk, which can lower insurance costs,” she says.
The desire to curtail energy costs has also become more prevalent in the current commercial real estate market.
“Energy efficiency is a major focus for commercial businesses in New Jersey,” says Peter Hatton, director of commercial operations at Hutchinson Mechanical Services. “Business owners can take advantage of a wide range of programs and incentives offered through their local utilities to improve system performance, reduce energy costs and support long-term operational efficiency.
“By upgrading to high-efficiency systems, property owners benefit from lower utility costs and reduced maintenance and repair expenses. These improvements can also offer tax advantages, while replacing outdated equipment with modern, energy-efficient systems increase overall property value,” Hatton adds.
“With the rising energy costs throughout the state, landlords who proactively secure energy contracts can win when it comes to securing new tenants as they provide a leg up through lower utility costs,” says Koller.
A new era of office space
Stephen Giorgio, principal/CEO of architecture and advisory firm Lammey+Giorgio, sees a renewed focus on quality over quantity when it comes to current office space demands.
“Organizations are choosing smaller footprints but investing more intentionally in the quality of the space they keep—air quality, daylight, power and data reliability, acoustics and flexibility all matter more than they used to,” Giorgio explains. “Buildings that can adapt to these needs are competing well, while those that can’t are finding it harder to stay relevant. The office now has to earn its cost by supporting productivity, culture and long-term flexibility—and that’s a design problem, not a leasing one.”
Modern office space is continually changing to support the modern workforce, according to Sproule.
“There’s a bigger focus on flexibility, collaboration and technology. … Companies want spaces that can adapt, use energy efficiently and hold up over time,” he says. “Creating modern office spaces often requires major interior build outs and renovations, and that is where union carpenters come in. Their training and craftsmanship ensure these spaces are functional, modern and built to last, saving building owners and tenants time and money over the long term.”
Mirroring national trends
Giorgio sees South Jersey’s commercial real estate market aligned closely with national trends, “particularly in logistics, health care, adaptive reuse and the continued flight to high-performing buildings.”
“The region’s advantage is that projects can often be delivered more efficiently and with greater
flexibility than in core metro markets,” he says. “The strongest opportunities we’re seeing are in unlocking value from existing assets—alongside selective new development—by making buildings work better for the people and operations inside them.”
Experts agree that South Jersey’s proximity to major cities like Philadelphia, New York and Washington, D.C. is a boon to the local industry.
“Although the market is not as robust as North Jersey, South Jersey provides lower cost alternatives to other areas of the state with infrastructure access via the Turnpike and I-295 to support the same industries targeting North Jersey,” Powell says.
This access to major highways and ports supports the industrial sector—what Koller calls the strongest long-term sector for commercial real estate in South Jersey—by keeping warehouse demand steady despite short -vacancy bumps in new supply.
“Like the rest of the country, well located infill and port proximate sites outperform remote big box locations,” Koller says.
Mertz sees demand for smaller light industrial spaces that enable last-mile delivery continuing to remain strong into the foreseeable future, and the fact that the “Class A” big box development pipeline in the area has declined “should bring stability to the market, while continuing to offer favorable conditions to prospective tenants.”
“For the industrial sector as a whole, vacancy rates did rise across the region to levels not seen
since before the pandemic,” Mertz adds. “This was due primarily to the tail-end of the development boom that saw some big box facilities delivered to market without tenants.”
On the whole, however, commercial real estate across the nation is on a steady upswing and Benstead sees that continuing in South Jersey, with long-term growth potential looking very promising.
“I continue to see buying pressure from New York and North Jersey buyers. They see commercial real estate as ‘reasonably priced’ compared to those areas,” Benstead says. “Also, our area has lots of jobs. If this remains strong, the demand will continue to push prices higher.”
Published (and copyrighted) in South Jersey Biz, Volume 16, Issue 2 (February 2026).
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Author: Kristen Dowd
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