Boston Report: 899,000-SF Absorption, Vacancy at 13.1 Percent and New Delivery: 1.5 Million SF

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boston-officeBOSTON–Transwestern has released its “officeSTATus – Q3 2016” report.  It was a very good quarter for the region’s office market: 899,000 SF of positive absorption.

Despite the big absorption number, the vacancy rate crept up to 13.1% (from 12.7% last quarter).  But that’s also due to a good reason:  1.5 million SF of office space were delivered to the market during the quarter.

Here are some main findings:

  • Vacancy in Boston’s Central Business District remained steady at 9.7 percent, as positive absorption of 644,000 square feet was balanced by 655,000 square feet of new space delivered.
  • In the last 12 months nearly two million square feet of office space have been delivered to the Boston CBD, with another 899,000 square feet in the pipeline.
  • In Cambridge, vacancy dipped below 3 percent for only the second time since 2000, to close at 2.9 percent.
  • The East Cambridge market has a vacancy rate of 2.7 percent, its lowest point since 2000, while Mid and West Cambridge are also very tight, at 1.4 percent and 5.4 percent, respectively.
  • The average asking lease rate in Cambridge for Class A space is $64.51 per square foot, more than $15 higher than only three years ago.
  • The Route 128 submarkets had 416,000 square feet of space absorbed, with the vacancy rate edging up 0.4 percentage points to 13.4 percent, due to 484,000 square feet being delivered to market.
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