"The results underscore the difficulty landlords are experiencing in attempting to fill big box vacancies arising from the earlier bankruptcies or closures of such major chains as Circuit City, Linens ‘n Things, National Wholesale Liquidators, Levitz, CompUSA and Home Depot Expo, as well as selective closings by chains like Pathmark, Office Depot and Office Max," Brunelli tells GlobeSt.com. "While a number of national and regional chains have stepped up to the plate and snapped up some of these prime locations at favorable rents, it could be some time before this glut of big box inventory is fully absorbed."

He pointed to Bed, Bath & Beyond; Best Buy; Christmas Tree Shops; Dick’s Sporting Goods; P.C. Richard & Sons; Ramsey Outdoor; Unique Thrift; furniture retailers Ashley and Bob’s; and R.J. Brunelli clients Sixth Avenue Electronics and Workout World as companies that have seized opportunities in vacant big box spaces in various New Jersey markets.

The big box and mid-sized space markets on and off the corridors also got a slight lift within the past year from the return under new or original ownership of four names that had gone through bankruptcy: Huffman Koos (with five of its nine showrooms and outlets located in Northern New Jersey), Fortunoff Backyard Store (two of its seven locations in the region), Marty’s Shoes (nine of its 14 stores in the region) and National Wholesale Liquidators (one of its seven stores in the region).

Brunelli says that the glut of big box inventory has been compounded by ongoing struggles of independent retailers, particularly operators of small furniture stores or other home furnishing shops whose business is closely tied to the moribund housing market. "Ordinarily, we will see new independents step in where others fail, but the credit crunch has clearly thwarted the ability of many entrepreneurs to launch new retail or restaurant concepts or expand their existing ones, exacerbating vacancies up and down the highways," he explains.

"Still, a number of franchised and company-operated chains with unique, lifestyle-oriented concepts have managed to buck this trend and take advantage of unique opportunities to get into small and mid-sized spaces at very attractive rental rates," Brunelli continues. Within the firm’s tenant rep circle those expansion-minded chains include such names as Ulta, Massage Envy, Muscle Maker Grill and European Wax Center.

Looking ahead, he tells GlobeSt.com, "Although all signs suggest that the economy has bottomed out, the absorption of commercial real estate--and especially retail real estate--is traditionally a lagging indicator. Against that background, we expect vacancy rates to hold steady or decline slightly through the remainder of this year and into the first half of 2011, with absorption accelerating in 2012. Several years later we could see a return to lower rates seen in 2006 and 2007, when the vacancy factor for the Northern New Jersey market hovered around 3%."