The sudden burst in B space seems logical given the fact thatalmost 1.3 million sf of class A space has been absorbed for thefirst half of this year in Northern and Central NJ. The grand totalof some two million feet of net absorption for the year to date isa solid 27% increase over the 1.57 million sf that was absorbed inthe first half of last year. These are indeed good times for boththe economy in general and the real estate business in particular.The vacancy rate for office space has dropped to 10%; if theabsorption rate continues, that number is expected to drop intosingle digits before the end of the year.

Middlesex, Monmouth and Somerset counties are particular hotspots for the class B phenomenon, according to Dolly. "In thosethree counties, net absorption over the last three months is about472,000 sf, or about two-thirds of the total for the region.Monmouth has seen a number of mid-sized telecom and healthcarecompanies set up shop.

"In Middlesex, the class A activity has been mostly in the formof leases under 20,000 sf," he continues. "The one major exceptionwas SDC, Inc.'s 10-year lease for 133,000 sf in Piscataway."Somerset County, meanwhile, has seen 150,000 sf of B absorption,mostly in small pieces. "Leasing activity just continues tosizzle," Dolly concludes.