Real estate investors in New Jersey and Eastern Pennsylvania are in a tough spot as millions of square feet of prime warehouse space built after the pandemic flood back into the market. According to a new report from CBRE, the post-pandemic boom in consumer spending that pushed developers to add Class A and B industrial properties along the New York City-Philadelphia corridor has fizzled out. And those lessees—largely retailers, manufacturers, and logistics firms—have begun offloading millions of square feet as economic conditions soften, leaving the region with an oversupply problem.

CBRE's analysis found that more than 32 million square feet of space available for sublease have been added to the market since the first quarter of 2023 in New Jersey, Philadelphia, and the I-78 and I-81 corridors in Pennsylvania.

The Central New Jersey region alone has added more than 2.5 million square feet to the market in the third quarter of the year, while 1.5 million square feet of space for sublease were added in Philadelphia, Northern New Jersey, and the I-78 corridor in Pennsylvania.