In East Orange and Irvington, for example, mom-and-pop retailers have been hit hard, and many are closing, contributing to vacancy in Essex County surging 210 basis points year-over-year and effective rents retreating 7.6%. Meanwhile, statewide inventory expansion of 1.9% this year will pressure key measures of property performance, such as vacancy.

Still, the report noted that some areas of the state are weathering the downturn better than others. In Passaic, North Bergen and North Middlesex counties, higher incomes and rent reductions have kept vacancy below 5%. Additionally, in Northern and Central New Jersey, Walgreens has leased some of the space vacated by Drug Fair, while P.C. Richard & Son has taken over several former Circuit City locations.

Falling property revenues are moderating the pace of acquisitions throughout New Jersey, and single- and multi-tenant investment trends have varied greatly so far in 2009, says Michael Fasano, vice president and regional manager of the firm's Elmwood Park office. Single-tenant deal flow has declined the least, as many buyers are still viewing these assets as reasonably safe during the recession. Cap rates are rising in this segment, however, following marked compression in recent years, due in part to buyers' growing risk premiums. Single-tenant investors have been most active near the Garden State Parkway in Union County and the New Jersey Turnpike in Bergen County.