Report Indicates Area Sublease Space Soars

GREATER BOSTON-Office vacancy rates have shot up in this area. But local brokers insist that it is the economy and not the local commercial real estate market that is slowing.

In a recent third quarter report put out by Cushman & Wakefield, the overall vacancy rate has soared up to 16.5%, up drastically from last year’s 5.3%. But Thomas Collins, senior managing director for the firm’s New England offices, maintains that it is largely the sublease space that is to blame for the increase in vacancies, indicating that the market here is not in real trouble. In the city’s central business district, vacancy rates were up to 11.1% for this quarter from 7.4% in the first quarter. Collins notes that 4% of the vacancy rate is due to sublease space with only 7.1 % direct vacancy. ” That would be considered favorable anywhere,” he tells GlobeSt.com. “ We don’t have a real estate problem, we have an economic problem.”

Collins points out that the economy was growing at an unbelievable 6% too 8% until recently and now companies simply need less space. Rates are still averaging around $50 per sf in the CBD and over $60 per sf in the Class A building market.