NEW JERSEY'S INDUSTRIAL SALES AND LEASING VELOCITY MOVE AHEAD IN 4th QUARTER 2009, FINDS CB RICHARD ELLIS
- CBRE's 4th Quarter 2009 New Jersey MarketView Report signals a market that appears to have reached bottom -

Saddle Brook, NJ, Jan 26, 2010 - /FLIERWIRE/-- The New Jersey economy appears to be stabilizing ahead of the national average, and the industrial real estate sector is playing its part in that recovery, finds CB Richard Ellis' Fourth Quarter 2009 New Jersey Industrial MarketView report. Among its findings are that both sales and leasing velocity rose, closing out 2009 with a strong finish, totaling 7.1 million square feet, despite the fact that large blocks of space have made their entrance onto the market, leaving the availability rate at a static 11.7 percent. Still, the newfound steadiness signals the onset of market stability.

"Sales and leasing velocity both increased dramatically, meaning that companies out there are looking to take advantage of the market and make deals before it is too late," noted William Waxman, senior vice president at CB Richard Ellis. "Leasing activity increased by almost 18 percent, and sales were 33 percent higher than in the two previous quarters combined. Availability does remain high, but the fact that it has not increased, even as large blocks enter the market, serves as an indicator that the market is stabilizing. Buyers are taking advantage of competitive asking prices, and leasing deals are happening now that landlords have dipped their rates to a level more palatable to prospective tenants. Taking rents, however, are still lower than asking rates, so while deals are getting done, there is still room for the pace to accelerate as landlords' hopes inch closer to the rates tenants are willing to pay."

Leasing velocity led the way, indicating that landlords are continuing to align asking rates with market reality and that occupiers are responding positively. Average asking lease rates declined by 10 percent from the previous quarter, to $5.55 per square foot, a rate not seen since the first quarter of 2003. That rate was also $0.55 lower than a year ago, yielding 4.37 million square feet of leasing activity during the fourth quarter of 2009, an increase of almost 18 percent over adjusted third-quarter velocity. Central New Jersey experienced the second straight quarter of $0.19 declines in asking rates, settling at $4.85 per square foot.

At the close of the fourth quarter, the sales activity tally reached 2.73 million square feet, a number that was 33 percent stronger than the previous two quarters combined. The increase in transaction momentum arrived during the fourth consecutive quarter of declines in asking prices. The current average, $69.89 per square foot, is 13 percent lower than at the beginning of 2009 and 16 percent below the peak of $82.97 per square foot, reached in the fourth quarter of 2007. The pace of change has quickened also, as the average asking price declined by $1.88 during the third quarter and then accelerated to $3.22 in the fourth quarter. Sales activity thus increased by 1.27 million square feet from the third quarter to the fourth quarter.

Net absorption fell to negative 1.22 million square feet, which is 80 percent less than in the previous quarter.

"Momentum is with the New Jersey industrial market, but unless the pace of properties coming to market slows, availability rates will not likely return to pre-recession numbers soon," stated Mindy Lissner, senior vice president for CB Richard Ellis. "One boon is that construction projects remain in check, giving the existing inventory an opportunity to balance itself without facing competition from new properties. Ultimately, we believe that the New Jersey industrial market just may have reached its bottom and is on its way upward again over the next 12-24 months."

The state's top fourth-quarter transactions include two from South Brunswicka 583,376-square-foot lease at 140 Docks Corner Road to G-III Apparel Group and the 418,213-square-foot sale of 329-331 Herrod Blvd. to Cabot Propertiesand two in Edisonthe 473,083 sale of 30 Clearview Road to Arizona Iced Tea and a 232,297-square-foot lease at 3001 Woodbridge Ave. to Ashley Furniture Industries. Rounding out the top five is a 375,000-square-foot lease at 1 Costco Way in Monroe to L.A. Enterprises.

About CB Richard Ellis
CB Richard Ellis Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world's largest commercial real estate services firm (in terms of 2008 revenue). The Company has approximately 30,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CB Richard Ellis offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. CB Richard Ellis has been named a BusinessWeek 50 "best in class" company for three years in a row. Please visit our Web site at www.cbre.com.