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No Substitute for the Real Thing

BOSTON-Already boasting a trickling pipeline and moderate negative absorption, withering sublease availability may save Boston from a worse fate.

By Ryan Clark | Updated on December 23, 2009

BOSTON-The Boston office market’s cup has not ‘overruneth’ with prosperity, but its meager pipeline, its moderate negative absorption and dwindling sublease availability are mitigating the damage felt by a dastardly economy. Asking lease rates for class A space are on the decline, but not nearly as drastic as comparable cities around the nation.

According to Richard Barry Joyce & Partners’ officeSTATus report for Winter 2010, class A asking leases dropped to $35.54 per square foot, a stumble of $0.24 since Q3. This is in part due to the market experiencing 421,000 square feet of negative absorption, further compressing asking rates, as vacancy increased 0.5%. The city as a whole now sits at a 15.5% vacancy rate.

However, if you think any of that seems like bad news, Brendan Caroll from RBJ may refocus your point of view. “There was a slowing trend in class A asking lease rates. These class A rates declined an average of 3.4% during the proceeding four quarters leading up to the fourth quarter of 2009.” However, he points out, “In the 4Q09, [there was] a decrease of 0.7% market-wide in class A asking lease rates. The rate of decline was lowered materially and the most significant slowing of this rate of decline was the bell weather districts: Financial District, East Cambridge and Waltham.”

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