The positive absorption is significant, the report indicates, as the previous two years experienced substantial negative absorption, most dramatically in the East and mid Cambridge submarkets. Vacancy rates still jumped 3% to nearly 20%, mainly due to the completion of the 290,000 sf building at 673 West Kendall St. in Cambridge and the repositioning of the former NECCO factory at 254 Massachusetts Ave. in Cambridge.

The increase in vacancies is also attributed to overcommitments of space taken by tenants in 1999 and 2000. But the report notes that the growth of a broad number of companies is a positive indicator for growth in demand for lab space.

The report further points out that the financing community has been more receptive to biotech companies than to other types of companies over the past three years. In 2003, 30% of all venture capital financings in the state were for biotech firms, up from 4% in 2000.