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Cambridge Market Not Ready to Celebrate Just Yet

CAMBRIDGE, MA-Despite recent real estate forecasts from Boston-area landlords projecting an increase in office rents, the market here has not yet bottomed out, according to Cresa Partners' fourth quarter market update.

By Naomi Grossman | Updated on December 29, 2003

CAMBRIDGE, MA-The market here has not yet bottomed out despite recent real estate forecasts from Boston-area landlords, projecting an increase in office rents, according to Cresa Partners’ fourth quarter market update. Rents that peaked at $65 per sf for class A office buildings in the third quarter of 2000 now average $30 per sf for class A space and $22 per sf for class B space, both of which are down the third quarter of this year, says Christopher Crooks, Cresa Partners principal.

Crooks, head of the firm’s Cambridge Group, notes that rates may fall another “few dollars per sf through mid-2004 and then remain flat through mid-2005, when a true recovery should finally be in place.” The vacancy rate, which was about 1% in 2000, now remains at 26%, where Crooks anticipates it will stay for some time.

There are isolated examples of increased activity, points out Crooks, such as the Chickering Group’s recent lease of 55,000 sf at One Charles Park. But most office transactions are in the 5,000- to 10,000-sf size range, and many are lease renewals and restructures.

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