"What's unique about Boston is that it is exceptionally strong in both its Downtown and suburb markets," Ross Moore, vice president and national director of research for Colliers International, tells GlobeSt.com. "No other city can make that statement."

Average rents for the city, at $70 per sf,, are only behind San Francisco. The suburb's average rent of $40 per sf is also the country's second highest. The city's growth rate was 4.5% while growth rate in the suburbs was a remarkable 7.3%. "Anything over 3% to 4% is a good growth rate," Moore points out.

The area's absorption rate--at 2.3 million for the city and 5.2 million for the suburbs--was also impressive, according to Moore, who emphasizes that much of that absorption occurred in the second half of the year, when the economy started to slide. In his breakdown of the numbers, it was the second half of the year that saw 60% of the absorption in the city and 78% of the absorption in the suburbs.

Moore does add a caveat though. "Absorption is calculated when a tenant physically takes space. If a tenant gave space back in the second half of the year, we may not see those numbers go down until 2001." The only other potential dark spot, adds Moore, is the sublease space, which he predicts will rise over the next year both Downtown and in the suburbs. Still, says Moore, "the numbers just don't indicate a recession coming. The anecdotal evidence suggests that we are starting to slide but the numbers don't indicate a slowdown. Firms are laying off employees and sales are sluggish but as far as the commercial real estate market, we don't see it."

The numbers also don't indicate a market that is less deep than it was. Six to nine months ago, notes Moore, five or six tenants were competing for a space that only one or two tenants are competing for now. A year ago, 10 to 15 buyers were bidding to buy a property whereas now you'll have three to four buyers. Moore adds, however, that could ultimately lead to a more vibrant local market. "The market was in gridlock here--1% to 2% vacancy rates is a very difficult market to operate in," he says. "When tenants can't find space, they'll move away, and growth will go somewhere else. That's a concern."

Moore also emphasizes that Boston's high-tech market is different from other high-tech markets in the character of its companies. "The quality of the tenant here is higher so there is less volatility. Most high-tech companies here are in it for the long term so they can better withstand a downturn."

Moore does point out though there are no guarantees. "Real estate does lag the business cycle," he says. "We didn't feel the pain of the recession in the early 1990s until a full year after it started. It's too early to make a definitive call but now there are no signs that the commercial real estate market has been affected."

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