New Jersey gets good news about its Central office market.

Grubb & Ellis Company announced the release of its First Quarter 2005 Northern and Central New Jersey Office and Industrial Market Trends report. Among the highlights of the Office Market Trends:

The Northern and Central New Jersey overall office availability rate declined to approximately 20% compared to 21% at year-end 2004.

Increased demand led to more than 2.1 million s/f of positive absorption during the first quarter.

Nearly 1.6 million s/f of the 2.1 million s/f absorbed in the office market involved class A space, which has emerged as the product of choice for companies seeking additional space.

With more than 860,000 s/f of positive absorption, the Hudson Waterfront recorded the largest volume of positive absorption in Northern and Central New Jersey.

Among the highlights of the Industrial Market Trends:

After remaining unchanged for the past three consecutive quarters, the overall industrial availability rate declined to 8.3% compared to 8.4%.

Pockets of growth, rather than widespread leasing velocity spanning multiple submarkets, continue to define the current industrial market.

The increase in demand for big-box distribution space was being countered by corporate consolidations, which have resulted in additional space being released to the market.

Strong demand for modern distribution space led to nearly 1.9 million s/f being absorbed in the Exit 8A submarket, which represented the highest volume of positive net absorption recorded in the industrial market.

"With more than 2.1 million s/f of positive absorption, the Northern and Central New Jersey office market's recovery took a confident step forward in early 2005," said Stephen Jenco, client services manager of Grubb & Ellis. He added that we have not witnessed such a large volume of positive absorption being recorded in a single quarter since the second quarter of 2000, when more than 2.3 million s/f was absorbed.

Regarding the industrial market, Jenco stated, "While the overall industrial availability rate managed to inch lower in early 2005, the industrial market continues to be impacted by an intense struggle underway between demand for modern, big-box distribution space and additional consolidations."

This struggle is evident by examining the individual market regions, which have been moving in opposite directions.

"With an inventory base consisting of predominantly older, lower ceiling manufacturing-oriented facilities, the Northern New Jersey market continues to be impacted by consolidations, while demand for modern warehouse space in Central New Jersey has led to declining availability rates," he said.