Final Cambridge Stats Belie 'Solid' 2007

CAMBRIDGE, MA-Dragged down by a slow fourth quarter, the office and laboratory sectors yielded lukewarm absorption levels and vacancy declines in 2007, but market experts maintain that activity was better than the data might suggest. “Overall, it was a very solid year,” insists Jones Lang LaSalle VP Peter Bekarian, whose firm tallied just over 260,000 sf of net absorption for 17 million sf tracked in three submarkets. DTZ FHO Partners has absorption at just 69,000 sf in its survey, while CB Richard Ellis registers 77,000 sf.

JLL’s Bekarian and CBRE principal Curtis Cole explain that the largest blocks taken down in 2007 were never factored into the statistics because the space involved was not being marketed. Monitor Corp., for example, renewed for nearly 200,000 sf at 2 Canal Park after threatening to depart the city altogether, while a 250,000-sf lease renewal and expansion by Akamai at 4 and 8 Cambridge Center also was struck before the space went up for grabs. The blockbuster 175,000 sf Microsoft lease at One Memorial Dr. was another off-market phenomenon, partly because the landlord allegedly muscled in on tenant options reserved for existing occupants.

The latter issue provided a bit of melodrama to the Cambridge leasing scene in 2007, but Bekarian says the greater effect was a boost for the stature of the city as a prime business address. Coupled with the arrival of Google to Kendall Square, the Internet powerhouses willing to pay upwards of $72 per sf “helped the psychology of the market,” relays Bekarian, and further pared down the availability. CBRE puts the office vacancy rate in Cambridge at a slim 6.8% versus 7.3% for JLL. DTZ FHO posts a 10.2% rate for the 9.7 million sf in its Cambridge survey.