"Based on a comparison of the performance of modern properties and the overall market, there has been an annual increase of 145% from 2004 to the end of 2008, with modern properties clearly outperforming the market," Welsh says.

Despite the fact that leasing velocity at the end of last year was 51% below the average of the prior four years, with renewals accounting for 41% of all activity (as compared to historic renewal levels of 24%) and the continued divide between pricing expectations of tenants and owners, which is at a historic high, there are still pockets of opportunities available in this marketplace, finds CBRE. For example, urban centers such as New Brunswick, Newark, Hoboken and Jersey City will receive significant attention, as both business and government focus on further developing these mass transit-serviced urban centers and incentives such as the Urban Transit Hub Tax Credit continue to entice tenants to these areas.

Additionally, spin-off businesses in the areas of pharmaceuticals and finance, which will result from the continued consolidation of the major players in these sectors, will remain in New Jersey due to its attractive pricing and highly trained workforce, finds the white paper. And the health-care industry will also be a significant driver in the state, as expanded medical facilities and hubs in Princeton and Hackensack will continue to drive significant growth in the medical office building sector and supporting industries.

"Ultimately, finding opportunity for tenants and owners in the new normal will require more analysis and understanding of market nuances, as micro-market segmentation continues in seemingly comparable markets," says Welsh. "Our research shows that opportunities do in fact exist, and while some will remain focused on cost containment, others will see a unique window of opportunity to capitalize on the market transformation that the new normal is creating."