Colliers Meredith & Grew Releases Boston Market Report

Colliers Meredith & Grew has released its Third Quarter 2009 Market Viewpoint, including commentary on trends and transactions in the metropolitan Boston real estate and capital markets. A section is included on each of the following: Boston, Cambridge, Suburbs, Investment Sales, and Capital Markets.

The overall vacancy rate increased from 17.6% to 18.0% during the quarter as total occupied space decreased by 640,000 square feet. This represents the fifth consecutive quarter of net negative absorption and nearly 4 million square feet of negative absorption year-to-date. Nonetheless, the pace of contraction appears to have slowed, particularly in the core Boston and Cambridge markets. Observations on the third quarter results follow:

- The Boston office vacancy rate remains unchanged at 13.0% since the second quarter, although it is significantly higher than the third quarter 2008 vacancy rate of 9.3%. Two further indications that the market deterioration may be subsiding are noted in the absorption and sublease statistics. After recording over 1.2 million square feet of negative absorption in the first half of 2009, the third quarter negative absorption registered at 17,000 square feet. Sublease inventory, which had been steadily increasing since the first quarter 2008, decreased by 150,000 square feet.

- The vacancy rate in the Cambridge office and lab market increased from 14.6% to 15.9% as the construction completion of the base building at 650 East Kendall Street added 311,000 square feet of "biotech ready" lab space to inventory.

- Most of the negative absorption this quarter was recorded in the Suburbs, where the markets are typically slower to recover. The suburban vacancy rate is 20.7%, compared to 20.2% at mid-year and 17.7% twelve months ago. Negative absorption for the year totals over 2.4 million square feet and is spread across all submarkets.

- The year-long standstill in the Investment Sales and Capital Markets eased slightly in the third quarter as two CBD sales and some selected suburban transactions provided a sense that buyers and sellers might finally be willing to engage. Although many capital providers remain sidelined and the degree of distress still to hit the market is yet to be determined, pockets of liquidity are beginning to emerge.

In addition to its Market Viewpoint report, Colliers Meredith & Grew produces Retail Viewpoint, a semi-annual Life Sciences REview, Capital Market Briefing reports and Week In Review (a weekly recap of market-related news articles), as well as periodic specialized research reports.

Download the Full Report:

http://www.colliersmg.com/pdfs/viewpoint_q3_0...