"There are reasons to be very optimistic," says RBJ VP Brendan Carroll, whose research team estimates fourth quarter net absorption at 294,000 sf, barely one-third of the average of 824,000 sf recorded over the past nine quarters. Carroll attributes the downturn more to a short-term anomaly than the start of a depressed trend, while RBJ principal Brian McKenzie stresses that "the fundamentals of the market are still doing very well," and says the fourth quarter was better than he had anticipated given a torpid summer. One of McKenzie's territories is the I-495 North area that seemingly has recovered from a brutal stretch that began when the technology heavy submarket was crushed by the tech crash of 2001.

According to RBJ, the 14.1 million sf submarket represents just 8% of the Greater Boston inventory, but registered 39% of all the positive absorption recorded in the fourth quarter. "It has been in the dumps for a long time, but there has been a noticeable transition," says Carroll. The submarket still has a vacancy rate exceeding 25%--the highest on I-495—but McKenzie says rising rental rates in core areas such as Waltham and Burlington are pushing cost-conscious tenants into the northern area. Besides the deals that did land in the quarter, such as Circles taking 39,000 sf at 300 Apollo Dr. in Chelmsford, McKenzie says there are several negotiations that have carried over into the new year.

"I think it looks pretty vibrant for the early kickoff," says McKenzie, who adds that another trend that became entrenched late in 2007 and will be a major force going forward is the sustainability movement. Buildings that do not aspire to fit certain environmental standards could be left by the wayside, says McKenzie, presenting potential troubles for older product. "There is a lot more awareness," says McKenzie of green design, while Carroll notes there is already a dichotomy of success based on age. In I-495 North, the 2.1 million sf of space delivered since 1995 is 10.8% vacant, he notes, whereas the remaining inventory is at 27.7%.