Other early renewals, both large and small, have been inked in recent weeks, including:

• Home products provider De'Longhi re-upped its contract for 200,000 square feet of warehouse/distribution space in Wood-Ridge;
• Franco Apparel renewed its lease for 148,147 square feet in South Brunswick. CB Richard Ellis negotiated the long-term renewal;
• A&E Distribution Inc. signed at five-year lease renewal for 63,400 square feet at Mack-Cali's 200 Riser Rd. in Little Ferry;
• Cushman & Wakefield represented Grant Thornton LLP in its long-term lease renewal for 16,000 square feet at the Metropark Corporate Campus in Edison.

Landlords, meanwhile, keep their buildings filled at a time when few users are moving or expanding. "It's better to keep cash flow than risk having to carry the cost of empty space," says Richard Baumstein, executive vice president at Cushman & Wakefield's East Rutherford office. Conversely, tenants are averse to spending dollars on an expensive relocation.

With the economic picture still cloudy, Jeffrey Schotz, executive manager officer and head of the New Jersey office of First Service Williams in Parsippany, finds that tenants are more likely to undertake short-term renewals. "They don't want to make commitments that go out too long because it takes away any flexibility they may have to downsize or take additional space," he says. "Companies don't know what is going to happen economically or politically, so they will renew their lease for two or three years." Meanwhile, a renewal gives the landlord "a chance to continue in this very difficult marketplace to collect rent and pay its mortgage and obligations," Schotz says.

Of the few dozen deals Paul Giannone, Iselin-based managing director at Jones Lang LaSalle, has done since the beginning of this year, nearly 90% have been renewals versus relocations. In some cases, the tenant is giving back space, and in return secures a rent reduction. For its part, the landlord gets a longer term on the lease, which makes the building easier to take to a lender for a refinance. "The landlords preserve occupancy, are able to defer operating costs related to vacant space and lock in long-term cash flow for the purposes of improving the building's value and ability to get financing," Giannone explains. "The tenants are able to reduce costs today for a longer-term commitment, which is what everybody is trying to do to improve their margins."

Even with trimmed-down rents, more years on a lease and occupied footage are the golden eggs for owners. "A landlord has never gone out of business with a full building," declares Jerry Barta, vice president of leasing and marketing for Alfred Sanzari Enterprises in Hackensack.

Barta also maintains that the blend-and-extend renewals could be a signal that tenants and their brokers feel rents have reached bottom. "So they try to lock something in now before prices start creeping up," he says.

With an abundance of vacant office and industrial space in the marketplace, tenants appear to have the upper hand in negotiations. Yet Barta asserts there is a line a landlord will not cross even in a downshifting market. Some occupants may be undergoing fiscal distress and need some forbearance from the landlords; others simply want to use the recession as leverage to reduce rents.

In one instance, a Sanzari tenant with three-and-a-half years left on its lease requested a drastic cut in rent and wanted to give back half of its space. "It doesn't make sense for us and we are not going to do it," Barta says. "The market is just not that ugly."There is always a chance that the tenant, by renewing and extending its lease early, may be locking in rents that could go lower in six more months. Contrast that to the landlord's risk of letting a rent-paying tenant leave with the prospect of having untenanted space for an extended period in a slow leasing market.

Yet most agree the potential for a huge spike in rents in the near future is extremely doubtful. "It's very unlikely in the next two to three years there's going to be such a huge turnaround in our economy that is going to drive significant job growth that in turn is going to drive rents through the roof," Schotz says. "It is not going to happen."