C &W's report said that the job growth that has occurred has been in the professional and business services, trade, transportation and utilities sectors in northern New Jersey, and in the educational, health, professional and business services sectors in central New Jersey.

Demand for office space in northern Jersey was up 44% in Q4 from Q3, percent, on the strength of the financial, insurance and life sciences industries, according to C & W. Bergen and Morris counties had the strongest performances.

For the full year, however, demand trailed 2011 by 32.4%. “The total of 3.7 million square feet leased year-to-date was a 10-year low,” said Medina.

Large firms have been less inclined to spend capital on real estate costs and, as a result, have opted to stay in place, he observed. Renewals, totaling 2.9 million square feet, accounted for almost 44% of all leasing activity, according to C&W. Some of the larger renewals have included PSE&G in Newark, UBS in Weehawken and Morgan Stanley in Jersey City.

The vacancy rate in northern Jersey was 18.3% at the end of 2012, a recent high, by C&W's accounting. That reflected the slow leasing activity and a number of corporate dispositions, including AIG's shedding of 150,000 square feet at 90 Hudson Street in Jersey City. As a result, average rents continued a downward trend, dropping slightly from Q3 to Q4, to $25.59 per square foot.

Largest leases for the year included Biomet's 102,224-square-foot transaction at 399 Jefferson Road in Parsippany; The Bank of Tokyo-Mitsubishi's 100,274-square-foot expansion at Harborside Financial Center III in Jersey City; Prudential Real Estate Investors, 95,238 square feet at 7 Giralda Farms in Madison; and Citigroup's 92,554-square-foot sublease at 480 Washington Blvd., Jersey City.

The final months of 2012 did see the strongest investment activity in four quarters in the northern part of the state. “But while the number of investor sales rose as 2012 progressed, the total volume lagged 2011 by 2.1 million square feet,” the report said.

The largest deals were Cole Real Estate Investments' $53 million acquisition of 8 Sylvan Way, Parsippany, and Bayer Corp.'s $45 million acquisition of 67 Whippany Road in Whippany.

In central Jersey, the pace of leasing was 17.2% behind 2011. “As in northern New Jersey, many firms decided to sit on the sidelines,” said Medina. “Significant corporate expansions were scarce, with companies again reluctant to spend capital on real estate.”

The vacancy rate in the central part of the state was 20.3% at the end of the year.

Like the north, the central region ained a little momentumin Q4, with 20% more leasing activity for the quarter than in Q3. C&W said transactions were concentrated in the I-78 corridor and the Woodbridge/Edison submarket, and leasing was driven by computer/information services, pharmaceuticals and insurance firms.

“Many larger tenants renewed their leases throughout the year, taking advantage of current rental rates and concession packages,” said Medina. Some of the larger renewals were United Healthcare, SES Americom and Barnes & Noble.

Average asking rental rates in central Jersey inched higher to $23.80 per square foot at the end of the year, an increase C&W said was fueled by higher-priced Vass A space added to the marketplace. Overall vacancy was up a half-percent from one year earlier, the result of a 2% hike in Q3.

Larger leases in central Jersey last year included Brother International, 101,754 square feet at 200 Crossing Blvd., Bridgewater; Allergan,93,000 square feet at 200 Somerset Corporate Blvd., Bridgewater; and EisnerAmper, 87,083 square feet at 115 Wood Avenue South, Iselin. The largest sales were AT&T Middletown NJ's $107.8 million acquisition of 200 Laurel Avenue in Middletown; and TA Realty's $73 million acquisition of 170 Wood Avenue South in Iselin.