SADDLE BROOK, NJ-The New Jersey office market's availability rate continued to climb upward during the first quarter of 2010, despite increased leasing activity, as consolidations and renewals accounted for much of the leasing activity that did occur, finds CB Richard Ellis' first quarter 2010 New Jersey office report.

"An increasing number of companies have taken advantage of the opportunity to control operating costs by right-sizing, and they negotiated their new terms during the most favorable tenant's market yet," says Jeff Hipschman, senior managing director for CB Richard Ellis. "Despite a six-cent increase in asking rates over Q4 2009 figures, to $24.44, taking rates are still trending 19% lower than asking rates. Thus, while transactions picked up, the fact that occupiers shifted to smaller footprints resulted in fewer square feet occupied overall."

Leasing velocity reached 1.5 million square feet during the first quarter, found CBRE's report. That's a staggering 39.5% higher than a year ago, and a modest 1.7% increase over the same period in 2008. However, negative net absorption of 397,027 square feet left the market with a vacancy rate of 16.9% and a 21.9% availability rate. That equals 34.4 million square feet of available space, which was just shy of the record high of 34.6 million square feet that was set two quarters ago. In addition, six of the past eight quarters have experienced negative net absorption, including negative 2.4 million in the first quarter of 2008 and 1.25 million in the first quarter of 2009. Nevertheless, half of New Jersey's submarkets registered flat or positive absorption, including Montvale/Woodcliff Lake's positive 246,549 square feet.