"Smaller deals are defining the market, and in fact there's areasonable amount of activity in the 100,000-sf and under range atExits 8A, 7A and 7, and even as you go up north," says Stan Danzigof Cushman & Wakefield, East Rutherford, NJ. "But a notableshortage of larger deals this year has created a dry spell in the200,000-sf and up range, which has pushed absorption downthroughout the market.

"The good news is that a few tenants that have been hanging outin New Jersey for an extended period of time are appearing tobecome more active," Danzig says. "While we've seen these potentialtenants 'kicking tires' in fits and starts, they seem to be moreserious now."

Still, Danzig terms the industrial market "fragile andoverbuilt." According to C&W's numbers, the vacancy rate hasjumped 1.2 points to 7.2% over the past three months. On the otherhand, direct rents have held steady at about $6.46 per sf, aboutthe same as a year ago, and "leasing activity has rebounded a bit,"he says.