Commercial real estate analysts have taken the direct approach. Just three weeks ago, Forbes magazine ran the headline, “Commercial Real Estate Will Collapse.”

By 2013, the article states, at least $1.3 trillion nationally in commercial financing will come due, $160 billion of it the result of scrutiny by government and financial institutions. SmartMoney reports that there are $3.4 trillion in outstanding loans right now. And Goldman Sachs has estimated that $180 billion in commercial mortgage loans ultimately will be absorbed by banks.

Typically, among such prognostications of doom, New Jersey’s dependable, solid commercial realty base has been able to roll with the hits and float cautiously on. This effect has been buoyed by a historically sound office market that shoulders much of the load.

William Barish, managing partner of Commercial Property Network Inc. on Emmons Drive, thinks the state will weather the turbulent times ahead. This is true particularly in the office market, which he says is actually faring better now than it has in previous economic downturns.

The market’s relative health is due to two factors. First, the lack of new construction in recent years has meant no surplus of empty buildings to help devalue and dilute the market. Office vacancies in central New Jersey, in fact, remain where they have been all year, in the 15 to 20-percent range.

Second, most high-quality office space in the region has had significant financial support to see it through the lull. High and medium-quality office space, says Barish, is stable, if not in great shape, and we will most likely not see a collapse similar to the residential real estate bust of this past year. “But there will some problem areas,” Barish says.

Take the central New Jersey industrial and warehouse submarket. With yawning vacancies and few tenants lined up, this is a market teetering on very wobbly legs.

Commercial real estate firm Colliers Houston & Co., which has an office at 116 Village Boulevard, released a third-quarter report last week that points a steady incline in industrial vacancy rates in the central New Jersey market since the beginning of 2007. Then at a relatively normal 7.4 percent, vacancy rates in this submarket reached an average of 10.5 percent by October.

Conversely, as vacancy rates have increased, average rental rates and absorption rates show an almost diagonal nosedive since the middle of last year. Then at $5.37 per square foot, rents have dropped to an average $4.92 per square foot.

The central New Jersey market has more than 277.3 million square feet available in 3,255 industrial buildings, and roughly 30 million square feet of it is unoccupied, the company found.

And for the first time ever there were no new commercial projects announced during the quarter.

The Turnpike Exit 7A (outside of Robbinsville and Hamilton) and Exit 8A (Cranbury) markets are in the worst shape of any submarket between Hamilton and Newark, by far. With 4.2 million square feet of industrial space available, Exit 7A carries a vacancy rate of 33.6 percent. Its average asking rent, $4.79 per square foot, is second lowest only to Exit 8A, which asks an average of $4.47 per square foot. Its vacancy rate is 22.2 percent, according to the report.

The next worst is the Exit 10 in Metuchen, with a comparatively small 14.3-percent vacancy rate.

Exit 8A also suffers from a negative absorption rate, having lost almost 875,000 square feet this past quarter. Exit 7A’s only bright spot is that it gained more than 169,000 square feet of net absorption.

CB Richard Ellis, whose area headquarters are at 700 Alexander Park, released its own report on November 23 that is slightly more optimistic about the 7A and 8A markets. The firm, which uses different criteria for identifying and measuring available industrial space, finds that Exit 7A has a 29 percent vacancy rate while Exit 8A has 24 percent. But these are still numbers that market analysts have called everything from unbelievable to staggering.

Third Quarter Commercial Activity:

Despite the upswing in vacancy rates, central New Jersey’s industrial market does have at least a minimal pulse. Colliers Houston reports eight leasing and sales transactions in the Exit 7A, Exit 8A, and Princeton submarkets in the third quarter.

Also, approximately 576,000 square feet of industrial space is being developed at 17 Thomas J. Rhodes Industrial Drive in Trenton, a park scheduled to be open by July, 2010.

Colliers Houston did not report the 116,000-square-foot lease signed by investment firm United Capital for 27 Engelhard Drive in Dayton on November 23. United will lease the space to TW Metals, a subsidiary of O’Neil Steel.

Exit 8A

Black Rock Realty: The company sold 160,477 square feet at 322 Half Acre Road in Cranbury, for $6.4 million to Jerc Partners.

CRP Commerce Drive LLC: Sold 108,000 square feet at 35 Commerce Drive in Cranbury. No other details are available. The online youth culture clothing retailer leased 155,458 square feet at 17 South Middlesex Avenue in Jamesburg from Black Rock.

Lamitech: The manufacturer of card stock and paper products leased 80,223 square feet at 322 Half Acre Road from Black Rock.

DiPinto Brothers Transportation: The Edison-based trucking company leased 62,711 square feet at Heller Industrial Park.

Metaverse: The online art warehouser and retailer leased 30,000 square feet at 49 Stouts Lane in South Brunswick from SK Properties.

Exit 7A and Princeton

Scholastic Bookfairs: The book distributor leased 89,662 square feet at 14 Applegate Drive in Robbinsville from Matrix Development Group.

Pharmasset: The clinical-stage pharma company leased 30,000 square feet at 303 College Road East from National Business Parks.

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