Mid-Year Reports Blunt Cambridge Recovery

CAMBRIDGE, MA-Much has been made about this city’s office market recovery, but on paper, the resurgence appears to have eased during the first half of 2007, especially outside the core Kendall Square district. According to industry observers, however, there is an undercurrent of activity likely to break through over the near term.

“It has felt a little soft, but there are a lot of deals floating out there,” says Jones Lang LaSalle VP John Osten, whose firm registered negative absorption of 33,000 sf for Cambridge office space during the second quarter and just 55,000 sf of positive absorption through midyear. Cushman & Wakefield estimates the mark at minus- 61,000 sf for the quarter and negative- 6,000 sf for 2007. Grubb & Ellis also has absorption in the red for both periods, reporting minus- 107,000 sf during the quarter and a dearth of 55,000 sf YTD.

Osten cites a couple of factors for the tepid results amidst an atmosphere of renewal, mostly attributed to accounting anomalies. Among the biggest leases announced in the second quarter, for example, was Microsoft’s commitment to 180,000 sf at One Memorial Dr., a high-profile agreement that received advance fanfare after the tenant leaked news of the deal prior to completion. While declining comment on that element of the negotiations, Osten relays that the lease was not inked until early this month, leading to the statistical vacuum.