Overbuilding Impacts Local Vacancy Rates

GREATER BOSTON-Local vacancy rates are getting closer to the national average, according to preliminary figures released by Torto Wheaton research, and–shades of the early 1990s–that is due largely to a mini-building boom, according to an analyst with the firm.

Preliminary numbers indicate that third-quarter vacancy rates for 54 metropolitan statistical areas across the country are at 12.3%, up from 10.8% in the second quarter and 9.5% in Q1. For the MSA of Boston, third-quarter vacancies are 12.1%, which is a little better than the national average but a jump from the second quarter–which saw vacancies of 8.7%. “Boston was performing better than the overall picture,” Xochitl Leon, an analyst at Torto Wheaton Research, tells GlobeSt.com. “Now it is closer to the overall picture.”

Leon attributes the jump to the construction going on in the suburban markets. “There is a mini-building boom of sorts in the MetroWest market,” she points out. “It’s not as overbuilt as the last recession, but there is still a lot of construction compared with the last five years.”