Study: 2006 Occupancy Increases Over 2005

BOSTON-Office and R&D absorption rates for 2006 dropped significantly below 2005 levels in Boston and the suburbs even as occupancy levels continued to climb, a year-end study shows. According to a market review by Meredith & Grew, the region’s overall absorption rate for office and R&D space was 3.6 million sf in 2006, down from 6.2 million sf of absorption in 2005. Occupancy rates, however, trended upward with overall vacancy dropping from 18.3% last year to 16.9% in 2006.

“Absorption in 2006 was less than in 2005 but its still a very healthy number and it represents significant growth,” Mary Sullivan Kelly, chief research officer for Meredith & Grew, tells GlobeSt.com.

Boston came out the big winner in the absorption race, logging nearly 1.5 million sf for the year and marking the fourth consecutive quarter of positive growth. In 2005, two million sf of space was absorbed in Boston. The city’s 2006 overall vacancy rate also showed significant improvement, declining to 11%, more than two percentage points over 2005′s rate of 13.3%.