Competition gets tougher in Garden State.

For every space requirement on the market, prospective tenants are receiving about 10 to 12 proposals. In better times, three to four was typical.

Businesses are continuing to contract, leaving unprecedented amounts of office space available.

Even big pharma, one of the mainstay industries of Central New Jersey and now in a survival mode has undertaken mergers and out of state relocations, leaving large amounts of commercial space and thousands of jobs in its wake. And since the bottom line for commercial real estate is jobs, the market has been thrown into disarray.

For their part, landlords are becoming competitive and extremely flexible in lease negotiations and are offering generous concessions in the effort to keep their building filled.

Rents in Princeton are now averaging in the mid $20's, down from the upper $20's less than 18 months ago. And while vacancy factors in Princeton are currently 16% to 17%, well below the statewide average, they still reflect a significant number of tenants lost.

National Business Parks has always done whatever it can do to retain its tenants. This has been our operating policy in good times and poor. And now with a fragile economy this method of doing business is clearly showing its merits. College Park with its 815,000 square-feet is at the 97% occupancy mark with firms opting to renew in what is clearly a tenants' market.

In Morristown, where National Business Parks has managing and leasing responsibility for the Southgate Corporate Center, a three-building office complex, leasing at the recently-acquired, 139,000 s/f 465 South Street reflects the Morris County market where overall vacancy rates are currently in the 21% to 22% range.

Although we are more than 70% occupied we are finding leasing for the remainder of the building to be slow as firms with requirements shop around and examine all their options whether it's staying in place with an attractive deal from the landlord or doing better elsewhere.

Ironically, the emotionally-charged health care debate has dominated our national consciousness and the "cash for clunkers" program drew dazzling media coverage, while the basic issue of new job creation has largely faded into the background.

In our business it's very straight forward--without jobs, there's no need for real estate. So from our point of view new jobs are the imperative.

As employment traditionally lags behind other economic indicators, it's difficult to see the office market in a rebound for the next 24 to 36 months. Landlords will need to become even more aggressive in deal making; for tenants, this is a time of unique opportunity.

College Park at Princeton Forrestal Center is an 11-building complex fronting Route 1. Included among tenants are SES Americom, Panasonic, JPMorgan Chase, the law firms of Drinker Biddle & Reath and Bracco Research.

National Business Parks is the managing arm of Lawrence Zirinsky Associates, owners of College Park.

BY VINCENT MARANO

COO, NATIONAL BUSINESS PARKS