Office trends: Boston extends absorption streak; New Jersey's flight to quality.

Author:Tucker, Michael
Position::Commercial
 
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Greater Boston's office market extended its positive streak to eight quarters, with tenants absorbing 493,000 square feet during the first quarter, according to Houston-based Transwestern. The activity drove marketwide vacancy down to 12.7 percent.

"Greater Boston's office market is on a remarkable stretch of positive activity," said Chase Bourdelaise, Transwestern research director for the Northeast. "Based on the number of high-profile move-ins scheduled for the remainder of the year, as well as the 4.1-million-square-foot construction inventory, we anticipate the run to continue."

Vacancy dropped to 9.3 percent in Boston's central business district (CBD), while financial district vacancy reached the 10 percent threshold for the first time since 2008, Transwestern reported. Cambridge, Massachusetts, submarket vacancy rose slightly to 8.6 percent due to some large tenants moving out of market but Bourdelaise said availability dropped "dramatically" there, from 11.5 percent to 8.8 percent in the past quarter.

Along Boston's Route 128 high-technology corridor, vacancy fell to 13.3 percent as tenants absorbed 442,000 square feet of space. The Interstate 495 submarkets proved exceptions to the rule, with total negative absorption of 89,000 square feet, though Bourdelaise said class-A asking lease rates crept upward.

In a separate report, Transwestern reported New Jersey saw a "flight to quality" that buoyed the state's office market, said Matt McDonough, managing director.

"Recognizing the consistent attraction to quality properties, some office owners are beginning to raise asking rents, even for higher-level class-B...

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