In the class A sector, leasing volume tallied up to 950,000 square feet, down from 1.8 million square feet in Q1. Along with that decrease came a reduction in rents, which went from $27.13 a square foot in the first quarter to $26.98 at the close of Q2.

"There will continue to be an element of uncertainty in the market over the next few months, as the unemployment rate continues to increase and maturing loans prove difficult to refinance," says Robert D. Rencarge, a senior advisor in CresaPartner's office here, in a statement. "In addition, large corporations will be forced to dispose of significant excess capacity, and many small business owners will experience sustained financial distress, further depressing demand for office space."

Yet these trends could be a boon for tenants looking to secure office accommodations. "There are still opportunities for tenants that are looking to relocate or expand within their current office space due to decreasing rental rates, which will continue to decline further through 2009 and possibly beyond," Rencarge states. "Landlords who would have previously resisted signing lease extensions of two or three years are more flexible and willing to work to keep tenants in existing spaces."

Several major office and industrial transactions were finalized in the second quarter. On the industrial side, East Coast Warehouse took 264,000 square feet at 150 Industrial Dr. in Jersey City; Breeze-Eastern signed a 116,000-square-foot lease at 35 Melanie Ln. in Whippany; and Electronics Expo acquired an 88,000-square-foot building at 70 Demarest Dr. in Wayne. Moving to the office sector, Siemens Corp. sold a 98,000-square-foot building at 186 Wood Ave. South in Iselin, and Virgin Mobile leased 93,000 square feet at 10 Independence Blvd. in Warren.