As Eisenhardt points out, a large part of the two cities' appeal, besides the more favorable rental rates, is access to Manhattan. Ferry services and PATH trains allow workers to move easily between New York City and New Jersey. In addition, both cities offer relatively new, high-quality class A office buildings, often right on the waterfront or near PATH stations. The most popular buildings include Waterfront Corporate Center in Hoboken and Newport Office Center, Harborside Financial Center and Exchange Place in Jersey City. These offices benefit not only from their close proximity to mass transit, but also from the fact that they all either include or are located near retail, restaurants and hotels, ensuring that their neighborhoods are vibrant and active at all hours of the day.

"You really have to offer something besides just a discounted office rental rate," says Eisenhardt. "You have to give a quality environment for tenants' employees."Those quality environments have already drawn several companies across the river, including Arch Insurance, which took more than 100,000 sf at Harborside Financial Center and Axa, which filled almost 250,000 sf at Newport Tower. In addition, Tullet Prebon expanded its space by more than 50%, to 100,759 sf at 101 Hudson St. in Jersey City.

Second quarter results for Northern New Jersey have not painted the rosiest picture, but the market is certainly nowhere near collapse. The Hudson Waterfront, the largest market by far at more than 18 million sf, reported a vacancy rate of 9%, according to Grubb & Ellis's quarterly market report. This is the lowest vacancy in all 12 Northern New Jersey submarkets. The market did record a negative absorption of about 270,000 sf, possibly due to financial services firms cutting back on their workforce and subleasing space. Overall net absorption stands at just over 100,000 sf for the year, however, and average asking rents remain the highest for all the northern submarkets, with an average of $34.51 per sf for class A space.