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Q4 Numbers Indicate Suburban Market Finally Hit by Recession

GREATER BOSTON-Vacancy rates shoot up in this area and those numbers are likely to rise further as leases signed in the late 1990s start to expire. Rents have fallen dramatically and it is unclear when the market is likely to pick up.

By Naomi Grossman | Updated on January 04, 2002

GREATER BOSTON-The heady days of the late 1990s are a dim memory for the commercial real estate market here as vacancy rates shoot up and brokers can’t even predict when the turnaround will be.

“I don’t see it ending in 2002,” Dan Cordeau, a vice president at Spaulding & Slye Colliers tells GlobeSt.com, referring to the current state of the market here. According to fourth quarter figures compiled by Spaulding & Slye, the vacancy rate in the suburbs of Boston is at 11.1%. Last year at this time the vacancy rate was 3.6%. The availability rate, which includes both direct and sublease space, has shot up to 21.7% this quarter, as compared with 6.7% for fourth quarter of last year. Last year saw a positive absorption of 1.9 million sf of space for the fourth quarter while fourth quarter of this year saw a negative absorption of 1.4 million sf of space.

“The availability rates rose very dramatically over the last year,” notes Cordeau, who adds that the vacancy rates are likely to increase further as the five year leases which were signed in 1997 and 1998–when there was a great deal of activity in the market–start to expire. This is especially true because many corporate users, says Cordeau, have room to accommodate additional staff. “People ensured growth that never came,” he says.

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