PARSIPPANY, NJ-New research by Jones Lang LaSalle found that New Jersey’s office market is very active in numerous sectors, with more than two million square feet of leases signed during the second quarter, and, for the first time in more than two years, an increase in asking rental rates--up 13 cents per square foot. Additionally, available sublease space dipped in the last three months by almost one million square feet.

However, vacancy in the New Jersey market continued to rise by 0.2% during the three-month period, in part due to five blocks of new space--each in excess of 100,000 square feet--that were placed on the market, bringing the overall vacancy rate to its highest level in history. “Despite the slight increase in the vacancy rate, the increase in rental rates combined with the dip in available sublease space are both healthy signs for the market,” says Dan Loughlin, managing director at Jones Lang LaSalle. “While we are still in the midst of a tenant’s market, companies are increasingly realizing that the market is beginning to level out.” Still, the overall office vacancy rate at the end of the second quarter was 26.4%, an increase from 26.2% last quarter.

The one million-square-foot decline in sublease space is partially due to an up-tick in leasing activity for sublease space, which accounted for 19% of all total leases signed during the quarter, finds JLL. By the end of the second quarter, sublease space accounted for 15.4% of available space in the New Jersey market, the lowest percentage in more than 12 years. But unlike the market as a whole, sublease asking rental rates fell by 3.5% to the lowest level since mid-2006.