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Boston Stands Tough

BOSTON-Although there is still rising negative absorption in the office market, a number of factors indicate that Boston rolled with the recession's punches.

By Ryan Clark | Updated on October 15, 2009

BOSTON-The Boston office market has seen 546,000 square feet of negative absorption in Q3 of 2009, but this increased vacancy only 0.5%. Landlords reactions are the same as they are everywhere else in the nation, which was a lowering of asking lease rates to $35.78, down 5.7%. With this said, the greater Boston Metro area is not spiraling down the drain, especially in comparison to the monumental tech bust that slapped it in the early 90s.

“[Boston] saw the marketwide vacancy rate increase by 16.1% in 14 quarters [during the tech bust],” Richard Barry Joyce & Partner’s VP of research Brendan Caroll tells GlobeSt.com. “So for 3.5 years we saw a 16.1% increase in vacancy, and because of the discipline in this market, we have only seen a 1.9% increase in vacancy during the present negative absorption trend.” The 16.1% increase was a cataclysmic result of a confluence of “exposure to dire local market conditions,” including imploding tech companies combined with over-building.

Caroll explains, that “16.1% was the increase in vacancy from 4.4%, at the lowest market vacancy, to 20.5%.” During this current market, the low was 13.1% and it is only up to 15%, according to RBJ’s officeSTATus report. “So thus far, we haven’t really come to the end of this thing yet,” he points out. “But it does appear in the outset that this is a much more restrained situation.”

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