In spite of ongoing concerns in the credit markets, retail properties in Bergen, Essex, Hudson, Morris, Passaic and Union counties are performing well and will post strong performance over the near term. A consistently steady level of retailer demand will maintain vacancy around 4% this year. Indeed, six of the area's seven submarkets currently sport vacancy rates less than 5%.

With space availability limited, owners are implementing healthy rent increases and could increase rents nearly 4% annually as long as current supply-and-demand fundamentals persist. On the supply side, completions are expected to rise this year, compared with 2006, but the square footage to be added will increase retail inventory only 1%.

Looking ahead, the planning pipeline is not extensive, ensuring that future completions will be gradual and in line with long-term demand trends. Given the difficulties inherent in bringing new projects to fruition, some areas of the market may lack sufficient retail space.