Just over 182,800 square feet of negative net absorptionoccurred in the 644-million-square-foot Northern and Central NewJersey industrial market during the first three months of 2010,according to a recent report from locally based Grubb & EllisCo. This was in stark contrast to the same period one year ago,when more than eight million square feet of negative absorption wasrecorded, as many business sectors aggressively reduced theirindustrial real estate holdings in response to the economicdownturn.

In fact, quarterly negative absorption figures have beentrending lower during the past year. After recording more thaneight million square feet of negative absorption during each of thefirst two quarters of 2009, 3.8 million square feet occurred in thethird quarter, followed by less than 1.1 million square feet duringthe final three months of 2009. "The diminished volume of negativeabsorption could indicate that many industrial users have completedtheir restructurings, which is allowing the limited demand toabsorb the current availabilities," says the report's authorStephen Jenco.

A closer look at the state's industrial market revealed that theNorthern and Central New Jersey market regions were moving indivergent directions during the first quarter. With an inventorybase consisting of predominantly older, lower ceilingmanufacturing-oriented facilities, many Northern New Jerseysubmarkets continue to be impacted by consolidations, which boostedavailability rates higher, Jenco tells GlobeSt.com. The NorthernNew Jersey overall industrial availability rate increased fromapproximately 12.1% at year-end 2009 to 12.6% in early 2010 inresponse to 1.4 million square feet of negative net absorption.This was in addition to nearly 11 million square feet of negativeabsorption registered in Northern New Jersey during 2009. "With theexception of the Passaic/I-80/ Route 3 and West Essex submarkets,the remaining eight Northern New Jersey markets posted negativeabsorption figures during the first quarter," Jenco says.