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NAIOP: Despite Vacancy Increase, Market Still Solid

CAMBRIDGE, MA-A recent, sudden increase in vacancy rates here does not mean rents will be plummeting anytime soon, according to David Begelfer, CEO of the National Association of Industrial and Office Properties.

By Naomi Grossman | Updated on April 01, 2001

CAMBRIDGE, MA-Despite all the hoopla surrounding this area’s sudden increase in vacancy rates, a local industry expert insists that the commercial real estate market here is still a tight one. While high-tech companies have dumped enough space on this market to increase its vacancy rates to 10%, David Begelfer, CEO of the National Association of Industrial and Office Properties, tells GlobeSt.com that this will not lead to plummeting rents in this area. NAIOP recently held a symposium on the Cambridge market.

“There is a good amount of space out there,” he notes, “but not all of it is available. Much of the space is through sublets or new construction and there is still a good demand here.” Begelfer points out that the increase in vacancy is only in the traditional office space–the biotech industry still has a vacancy rate of 3%.

Many companies, Begelfer adds, are avoiding making any decisions now because they are waiting to see if rents will come down. “Tenants sense a swing economy and they don’t want to commit to high rents, says Begelfer. “But waiting doesn’t mean the rents will come down. This is still a owner’s market. The number of transactions has slowed down. At some point they will have to act.”

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