Grubb & Ellis: Boston Office Vacancy at 14.3 Percent
BOSTON--The following is a brief overview of the Boston office market during the first quarter of 2010 released today by Grubb & Ellis.
• Office vacancy increased to 14.3 percent in the third quarter 2009, up 30 basis points from the previous quarter.
• The region posted positive net absorption of 106,747, in contrast to the 456,000 square feet of negative net absorption posted in the fourth quarter 2009.
• In what may be a sign that the market is recovering, asking rental rates rose $0.72 to $36.49 per square foot from the previous quarter.
• Sublease available space decreased 400,000 square feet from the fourth quarter to 5.5 million square feet.
Despite seeing the unemployment rate increase to 9.5 percent in the first quarter — a new 34-year high — it was recently announced that Massachusetts posted a net gain in jobs for the first time in 18 months, a critical signal for the office market. While overall vacancy continued its upward trend, the region posted its first positive net absorption in more than a year, possibly indicating the market is headed for recovery.
In the investment market, while the number of distressed properties such as 10 Milk Street, 31 Milk Street and Bay Colony remained a concern, a recent Bloomberg survey indicated that Boston's commercial real estate market was one of the healthiest in the nation with only 2.7 percent of its CMBS backed loans in delinquency and foreclosure.
