That's the gist of a new first-quarter office-market report on Northern and Central New Jersey, just out from Cushman & Wakefield of NJ, based here. According to Christopher Kinum, the firm's senior managing director and branch manager, "the facts and figures at the end of the first quarter of 2003 paint a similar picture. In general, the commercial real estate environment has continued to weaken slightly during the past three months."

And while Kinum suggests that "all the fundamentals are in place to begin the expected recovery," he does note that the overall vacancy rate was up slightly, rising to 19.3% from the 18.9% witnessed at the end of last year. Altogether, the latest figure is almost four points higher than the same time last year. Direct absorption in the first quarter was just under negative 1.7 million sf compared to negative 1.3 million sf in the fourth quarter of last year.

Which submarkets are hurting the most? According to C&W's figures, the I-287 and I-78 corridors, where vacancy rates range from 33.6% to 45.1%. Doing much better are the Hudson Waterfront, Newark and Princeton, where the vacancy rates are a much more manageable 12.9%, 14.4% and 13.6% respectively.

Rents, meanwhile, remain relatively flat, according to Kinum. In the latest report, average asking rents came in at $25.9 market-wide, down from $26.3 at the end of last year.

And while the amount of sublease space being shopped dipped from 11.5 million to 10.4 million sf, that isn't necessarily good news. It relates to the fact that "a significant amount of sublease space reverted back to building owners as direct availabilities," according to Kinum. "Looking at leases that will expire through the rest of the year and into 2004, the burden will continue to shift from space users to property owners."

Going forward, "we continue to look to the technology sector, including biopharma and pharma, to exercise the strength that it has shown during the past five years," Kinum concludes. "We expect users within these industries to generate a significant amount of activity during the next market boom. When that will come remains to be seen."