New Jersey is experiencing a persistent problem with office building vacancies, more than five years after the COVID-19 pandemic led to a widespread shift toward remote work. Many older office buildings, often referred to as “Class B” properties, remain largely empty as employees continue working from home at least part of the week.
The current office vacancy rate in New Jersey stands at 23%, an increase from about 16% before the pandemic. However, James Hughes, professor of urban planning and policy development at Rutgers University, said these figures do not capture the entire situation.
According to Hughes, most of New Jersey’s office space was constructed before major technological changes reshaped workplace needs. “By 1990, 80% of all the office space built in New Jersey had been completed,” he said. The emergence of the internet soon made much of this real estate outdated.
“Today that office inventory is between 44 and 34 years of age. All the stuff built then was before the internet, before mobile technology,” Hughes explained. “A lot of it was cheaply built. So now we have the aging, obsolete suburban inventory that we have to deal with today.”
Over time, younger workers showed a preference for urban environments with public transportation and walkable neighborhoods rather than suburban office parks. Even prior to recent events, vacancy rates were rising: “Even in 2012, ‘we had a suburban office problem’ with increasing vacancy rates in New Jersey,” Hughes noted. The onset of the pandemic only intensified existing challenges: “it was basically gas on the fire.”
