Like Boston, leasing in Cambridge and the suburban office markets at the close of the close of the first quarter shows little change from the numbers posted at the end of 2004. But also like Boston, brokers are predicting an uptick in velocity as the second quarter gets under way, with the MetroWest market seeing significant positive absorption on the horizon, Cambridge seeing some expansion deals, and 128 West getting a bump from the tenants flight to quality.

Cambridge, with 11.5 million-sf of class A and B office space and an additional 6.5 million-sf of lab space, registered vacancy rates of 17.9% for office and 20.8% for lab space, according to a Q1 report issued by Cresa Partners Boston. The numbers are slightly higher for Meredith & Grew (21.1% overall) which tracked a higher sample and Cushman & Wakefield (20% overall), which tracked a lower sample.

Significant deals for the quarter were led by Schlumberger's 190,000-sf at One Hampshire St., the Cambridge Innovation Center's 30,000-sf at One Memorial Dr., and the Whitehead Institute's 24,000-sf at Five Cambridge Center. The deals did not have much effect on the absorption rate, however as both M&G and C&W reported under 10,000-sf of positive absorption, hit most prominently by the loss of Babson Capital Management to Fort Point Channel. But brokers see reasons for optimism in this quarter.

"We are seeing activity pick up at a dramatic pace over the last quarter," reports Darryl Morse, partner at the Codman Co. Morse says Codman just struck a deal for 16,000-sf in Alewife, and has a lease out for another 30,000 plus-sf in Kendall Sq. Draper Labs added 26,000-sf at One Kendall Sq. last week.

"It feels like there's more velocity," says John Osten of Spaulding & Slye Colliers. "Some of the smaller companies are relocating in a flight to quality or (doing) small expansions. The tech sector is beginning to pick up and we're stating to feel a heartbeat in that segment of the market." In addition to the TJX deal, Workscape will reportedly take 72,000-sf at 123 Felton St. in Marlborough, and Genzyme is rumored to be taking a 25,000-sf floor at 200 Crossing Blvd. Staples is also rumored to be looking for an additional 60,000-sf, and are focusing their efforts in Westborough, according to sources."The market is definitely improving, especially Framingham and Natick," says Kevin Hannah of C & W. "Rents are improving and tenants are being forced out toward 495 West."

The hottest market right now appears to be 128 West, although there was virtually no statistical change. "Statistically, we're where we were at 90 days ago, but we're seeing a very measured, slow and steady recovery in the (128 West) market," reports M&G's Jim Elcock. Indevus Pharmaceuticals took 45,000 sf at Hayden Ave in Lexington, and Up To Date Inc. and Unica Corp. took 35,000 and 30,000 sf respectively in Waltham."The vacancy rate continues to drop slightly, " C&W's Mark Roth tells Globest.com. "Overall, tenants still drive the bus, but premium buildings with amenities are (now) able to increase rents."

The flip side of 128 West is 128 South, which has seen the vacancy rate drop 1.5 percentage points to 21.9% due to a series of 15,000 to 20,000-sf deals, but will lose 300,000 sf when Blue Cross Blue Shield leaves North Quincy for its own building, according to J. P. Plunkett of C&W. "Next year I think we're going to be looking at a vacancy rate in the low to mid-twenties," he tells GlobeSt.com. "Deals are being done, but for the most part, they don't represent any real growth. It's clearly still a tenant market."