But it is the sublease market that the study terms "the dominant real estate story in Boston." Currently, sublease space comprises 2.8 million sf, or approximately 40%, of the available space, a marginal increase from last quarter. According to Bryan Furze, spokesperson for Meredith & Grew, the vacancy rate is only 7% without the sublease space.

Net absorption is now at negative 353,110 sf from negative 637,964 sf a year ago--a reduction that the study notes, indicates "initial signs of improvement." Another potentially positive sign is the fact that asking rents for the Boston market declined only slightly this quarter to $43.43, down by three percent from last quarter's $44.78. The asking rent in class A buildings dropped from $48.45 to $47.65, a decrease that the study attributes to the sublease space that is located in almost every major building.

Yet, the study points out that despite the "sluggish conditions," activity has actually increased this quarter. It notes that over 45 transactions, comprising approximately 825,000 sf, have either committed or leased this quarter. Predictions are that demand will be steady over the next five years as approximately 15 million sf of space rolls over.