The report also found that the average net asking lease rate decreased five cents to $5.45 per square foot in the second quarter, a new 20-year inflation-adjusted low for New Jersey. Northern New Jersey dropped five cents to $6.35 per square foot and Central dipped two cents to $4.74 per square foot. The spread between asking and taking lease rates stands at 15.2% year-to-date. Sale prices decreased $2.09 to $68.23 per square foot. That number also represents a 9% reduction from the second quarter of 2009.

The average sale price across the Northern markets declined $1.70 to $75.16 per square foot, while Central New Jersey dropped an average of $2.83 to $61.54 per square foot. Even with lower rates, prices and increased transactions, the 4.2 million square feet of negative absorption put 2.77 million more square feet on the market than in the first quarter. Demand seems to be trending toward smaller facilities, and those transactions are expected to have a positive effect on absorption toward the end of the year.

"The 20-basis-point increase in the availability rate would suggest a further slowdown in the industrial market," says William Waxman, senior vice president at CBRE. "However, other slowly improving fundamentals like increased total leasing activity and sale transactions, as well as a market-friendly construction pipeline, indicate that the New Jersey industrial market will continue to inch its way toward recovery over the next few quarters."

Central New Jersey saw two projects come to market during the second quarter, which totaled 80,510 square feet, and more projects remain under construction, including one project in Northern New Jersey and six in Central New Jersey, which add up to 258,800 square feet. Other notable transaction highlights include a 935,000-square-foot renewal by Volkswagen Group of America at 47 Station Rd. in Cranbury; a 650,000-square-foot sale to investor A.L.A. Realty Associates at 297 Getty Ave. in Paterson; a 417,159-square-foot sale of 300 Fairfield Rd. in Fairfield to user Middle Atlantic Products; and a 312,412-square-foot renewal by East Coast Warehouse and Distribution Corp. at 202 Port Jersey Blvd. in Jersey City.