According to Matt Dolly, FSW's New Jersey-based managing director of research and marketing, the market is still in "wait-and-see" period until it is clear which direction the economy is going. He tells GlobeSt.com that we've yet to see the bulk of expected new sublease space. "While we are seeing pockets of shadow space, there haven't been a lot of reductions in space just yet, but it seems imminent."

While there is a perception by tenants that the market will continue to struggle in the near term, Dolly says that there has been a noticeable uptick in activity in the last 30 to 45 days. "More tenants in the market are going out early, but this may result in two to three year early renewals/extension," he says. Many tenants are reducing the term on their deals and looking for better deals on renewals, with "blends and extends" also becoming more prevalent.

According to its research, FSW is also beginning to see slightly longer term leases in some areas. "Those who choose to move can strike a very competitive deal because of the surplus of space," Dolly says, adding that there is a flight to quality in some areas where tenants are willing to make a move. "In other areas," he says, "tenants will stay in lower priced buildings, even where rents are lowered because they need to lower costs wherever they can."