BOSTON--Speculative office construction has returned to the Boston suburbs, initially in Waltham on Route 128 close to the Massachusetts Turnpike, reports Jones Lang LaSalle.

In Waltham, in response to declining vacancies and increasing rental rates, the first speculative construction in the suburbs in five years is underway, according to the 4^th Quarter office report from Jones Lang LaSalle. Here are the speculative construction projects in Waltham:

Boston Properties has started construction at 77 Fourth Avenue, a Class A, 204,000 s.f. premium office building and is responding to RFPs for major tenants. Completion will likely be in early 2008.

Duffy Associates is also constructing a new Class A, 142,666 s.f. building on Waverley Oaks Road in East Waltham that will be ready for occupancy early in 2007.

Bulfinch Companies has also begun site work on Trapelo Corporate Center, a 93,823 s.f. building fronting Route 128 that will contain 61,054 s.f. of medical/office space.

Reservoir Woods, a 451,000 s.f., Class A office complex in Waltham was delivered in the 4^th quarter, more than 80 percent occupied.

“When final statistics are complete we expect that 2006 annual net absorption in the Route 128/Mass Pike submarket should be in the one million s.f. range,” says Jones Lang LaSalle. “In Downtown Boston, the flight-to-quality has been replaced by a flight-to-value. Tightening in the high-rise tower market is pushing asking rents higher, with some landlords striking deals in the $60s. Net absorption in Cambridge will likely exceed one million s.f. in 2006 and large tenants seeking space must look to other markets because most of the permitted development is in lab not office product. Suburban submarkets adjacent to Waltham, which has low vacancy because of record leasing, will increasingly benefit due to available options and competitive but increasing rents.”