Vacancy rates rose slightly from the previous quarter, from17.56% to 17.79%, but decreased from 17.95% this time last year.The vacancy rate in Northern New Jersey was 16.58%, up from 16.31%last quarter and down from 16.85% in the first quarter of 2007.Central New Jersey continued this trend. The area's vacancy rate of19.57% was a slight rise from last quarter's 19.37% but lower thanlast year's 19.58%.

Leasing velocity overall has slowed considerably. Companies haveadopted a wait-and-see attitude regarding the economy and areseeking shorter-term deals, a situation that seems unlikely tochange in the near future.

Despite the economy, there were several leases signed for morethan 40,000 sf during the quarter. AXA Equitable Life InsuranceCompany took nearly 225,000 sf at the Newport Tower in Jersey City.AXA expects to move more than 800 employees to the new site fromNew York. Standard Chartered Bank signed a lease for 45,000 sf atTwo Gateway Center in Newark. In Morris County, National ExchangeCarrier Association extended its lease for 55,000 sf inWhippany.