The third-quarter 2026 numbers for New Jersey commercial real estate are in, and they tell a story worth paying attention to — especially here in Monmouth County. I work both sides of this business — residential and commercial — and the commercial side right now has a dynamic that’s easy to miss if you’re only watching home prices.
So here’s my honest, no-spin read on where our local office, retail, and investment markets stand as we head into the last stretch of 2026.
Office: Monmouth County is outperforming the region
The headline number from NAI James E. Hanson’s Q3 2026 office report: the Monmouth submarket posted 16.8% office vacancy — among the lowest of any submarket in northern and central New Jersey. Tenants leased more than 385,000 square feet here so far this year, the second-highest total in the region.
The statewide picture is moving the same direction. JLL’s Q3 research has New Jersey’s overall office vacancy at 24.5%, the lowest reading since late 2022. The market absorbed over 927,000 square feet in the third quarter alone — the sixth straight positive quarter — and nearly 80% of that demand landed in Class A buildings. Direct asking rents averaged $32.46 per square foot statewide, and $35.12 for Class A space.
The theme, as brokerages keep reporting, is flight to quality: tenants are shedding outdated space and upgrading to newer or recently renovated buildings. And JLL’s researchers flagged something Monmouth County specifically — options for large office users here are genuinely limited. Nothing new is under construction.
What that means in plain English: if you own well-located, quality office space in Monmouth County, the market is on your side right now. If you’re a tenant looking for space, don’t wait for a softer market — start early and work with someone who knows where the real availability sits.
Retail: the tightest it’s been in years
Retail is arguably the tighter story. Marcus & Millichap’s 2026 Northern New Jersey retail forecast has the metro’s retail vacancy falling for a sixth straight year to roughly 2.9% — projected to be the lowest of any major U.S. market. Rents are forecast around $30.11 per square foot, about 20% higher than 2022 levels. New construction deliveries are running roughly 80% below the last decade’s average — which is exactly why vacancy keeps falling.
Service-oriented tenants are doing the backfilling now: fitness concepts, entertainment uses, and experiential retail are the ones taking legacy retail space off the market.
For small business owners in Monmouth County waiting for “a deal” on a Main Street storefront or Route 35 spot — I’ll be straight with you: deals are scarce, and good space gets absorbed fast. And for owners of strip centers and neighborhood retail: you’re sitting on an asset the market clearly wants.
For investors: reading the cap rate correctly
Several clients ask me about cap rates every month, so let me lay out how they look across property types in published 2026 guidance — these are general ranges, not quotes on any specific property:
- Strip retail centers: roughly 7–9%
- Anchor retail: roughly 6.5–8%
- Medical office: roughly 6–7.5%
- Suburban office: generally 8% and up
A few things worth knowing. A cap rate is just NOI divided by value — the unleveraged annual yield. It is not your cash-on-cash return, and two properties at the same cap rate can be very different investments once you factor in financing, lease rollover risk, and deferred maintenance.
Higher cap rates usually mean higher risk or more work — and sometimes more upside for the right buyer. If you’re sitting on a property with big equity and thinking about your next move, a 1031 exchange can let you roll the proceeds into a larger or better-positioned asset while deferring capital gains taxes. It’s one of the most powerful tools in commercial investing, but the timelines are strict — don’t DIY it.
The bottom line
Three takeaways from the fall 2026 data:
- Quality commercial space in Monmouth County is genuinely scarce. Office vacancy at 16.8% and retail space historically tight means well-positioned assets have leverage — and good tenants need to move decisively.
- Don’t wait for a market softening that isn’t coming. Six straight quarters of positive office absorption and record-low retail vacancy argue for acting on today’s numbers, not tomorrow’s hopes.
- Do the real underwriting. Cap rate ranges are a starting point, not a decision. Every deal lives or dies on actual income, real expenses, lease terms, and local comps.
If you’re an investor evaluating a commercial property in Monmouth County, a business owner deciding between leasing and buying space, or an owner wondering what your building is worth in this market — let’s talk. I’ll give you the honest version, not the sales pitch.
— Mike Fabozzi, CENTURY 21 Thomson & Co.
