With rental rates sliding and an increase in vacancy, the Greater Boston Commercial Real Estate Market has yet to show signs of improvement, according to a recent report.
Continued expectation of decreasing rental rates and property values has prompted financially viable companies to pursue long-term lease transactions, building purchases, and/or build-to-suit opportunities, according to Thompson Hennessey & Partners’ Boston and Cambridge Office Market Review for the second half of 2010.
The average asking rental rate in Boston is $36.58, down 7.7 percent from the beginning of the year. However, there is 1.42 million square feet of sublease space available, a decrease of almost 120,000 square feet from the same time last year, according to the Boston commercial real estate firm.
With an overall vacancy of 8.3 percent and a positive absorption of 285,420 square feet, the Back Bay remains the healthiest submarket in Boston. Although the Back Bay’s overall average asking rent of $38.64 per square foot is slightly less than that of the Financial District, the submarket has enjoyed positive absorption across all building asset classes (including sublease space).
In Cambridge, the market showed 120,154 square feet of positive absorption with rents in most submarkets slightly increasing and vacancies slightly decreasing.
