SolidWorks Corp.’s expansion to 110,000 square feet at 300 Baker Ave. in Concord was one of the key suburban office lease deals inked during the first half of 2005.

A half-hearted effort might be the best way to describe Greater Boston’s office market at the midyear point of 2005. Despite upbeat trends on occupancy and rental rates, and a bevy of notable leases, statistical gains did little to lift the guard of some cautious observers, particularly amid reports of a sudden dip in demand.

“As a general statement, there aren’t as many companies out looking for space today as there were six months ago,” Trammell Crow Co. principal Joseph Fallon advised last week, even as his firm and other local brokerage houses were wrapping up a series of decent-sized transactions throughout the region. Trammell Crow research showed nearly 1 million square feet of net office space absorption in the first six months of 2005, plus absorption of another 750,000 square feet of research-and-development space.

The results were among several office market reports delivered last week, midyear overviews which all indicated positive leasing outcomes. Spaulding & Slye Colliers put net absorption of the 152 million-square-foot Greater Boston office market at 2.6 million square feet, while Richards Barry Joyce & Partners recorded 1.48 million square feet of absorption in the second quarter alone. That marked the seventh straight quarter of positive absorption, said RBJ Director of Research Brendan Carroll. The velocity of 6.1 million square feet since the end of 2003 has dropped the overall office vacancy rate by nearly 4 percent, he added. The encouraging numbers have made Carroll “cautiously optimistic, if not enthusiastic,” about the remainder of the year, yet he also warned of potential clouds on the Bay State’s economic horizon.

“It’s hard to argue with 1.5 million square feet of positive absorption and seven straight quarters of [growth], but there are many difficult challenges and uncertainties out there,” explained Carroll, including the loss of population in Massachusetts and an affordability gap which some fear could force companies to relocate elsewhere. Boston’s Financial District is among Carroll’s chief worries, given that RBJ has net absorption in that 34 million-square-foot market in the red by 136,000 square feet during the past 12 months, including negative absorption of 19,000 square feet in the second quarter.

Companies “are proving they can accomplish their jobs in areas of lower cost without fear of any degradation of quality,” said Carroll. Among the latest hits along those lines is the announcement that OneBeacon Insurance Co. will vacate 160,000 square feet in downtown Boston in favor of Canton. Fidelity Investments also recently said it would leave a 300,000-square-foot gap behind at One Federal St. when its lease expires in 2007.

Boston’s Back Bay enjoyed a particularly robust six months, headlined by the 350,000-square-foot renewal by Investors Bank & Trust at the John Hancock Tower and a corresponding lease for 150,000 square feet at Copley Place. That activity and other leases gave the city’s second largest submarket 375,000 square feet of net absorption in the second quarter, RBJ reported, dropping the direct vacancy rate to 10.2 percent. There is another sizeable chunk of sublease space in the market, however, bringing the Back Bay’s availability rate to 15.6 percent.

‘Summer Slowdown’

The technology bubble that burst in 2001 is also having a lingering impact, according to Carroll. Not only have Avaya Inc. and Nortel Networks recently revealed consolidations that will result in more than 300,000 square feet of space being returned to the suburban market, RBJ assessed negative 250,000 square feet to its Financial District absorption totals following the dissolution of the Testa Hurwitz law firm, a technology-heavy practice that folded last year. Had those results not been included, the Financial District would have had positive absorption for the year in the RBJ report.

Four Hub submarkets tracked negative during the second quarter, but the city had 410,000 square feet of net absorption, according to RBJ. Cambridge was up by 173,000 square feet and the suburbs posted a gain of 901,000 square feet, dropping the Greater Boston office market vacancy rate a full 1 percent to 17.9 percent.

Cambridge has seen its vacancy rate slip even further to 16 percent, well below the market peak of 23.4 percent recorded by RBJ in the third quarter of 2003. RBJ President Robert B. Richards Jr., who specializes on the Cambridge market, said both the office and laboratory sectors have seen demand dwindle. “We’re a little bit into the summer slowdown, but hopefully it will pick up again in September,” said Richards. Class A asking rates have remained steady at $28.44 per square foot, however, and Carroll said that the amount of sublease space available in Cambridge has been cut in half from what it was a year ago. Smaller tenants appear to be driving the market, observed Richards, who said he believes the market fundamentals are relatively strong going forward.

On the suburban front, Spaulding & Slye put net absorption through midyear at a healthy 1.5 million square feet, led by 585,000 square feet in the Route 128/Massachusetts Turnpike market to bring the vacancy rate down there to 15.6 percent. Two of the submarkets had negative absorption, with Interstate 495/North down by 155,000 square feet and the Northwest corridor down by 175,000 square feet. The overall suburban office vacancy is now 17.4 percent, according to Spaulding & Slye.

Among the key suburban leases struck during the first half of 2005 was PFPC Inc.’s renewal of nearly 350,000 square feet at 4400 Computer Drive in Westborough, and Avaya’s consolidation into 80,000 square feet at 150 Apollo Drive in Chelmsford. Having just completed a 55,000-square-foot renewal and extension on behalf of Boston Scientific in Natick at Cochituate Place, Fallon also brokered the 63,000-square-foot lease by Staples Inc. at One Research Drive in Westborough last quarter, with Spaulding & Slye Colliers Senior Vice President Phil DeSimone acting on behalf of the landlord, Berkeley Investments. Also, SolidWorks Corp. expanded to 110,000 square feet at 300 Baker Ave. in Concord, a lease negotiated by Trammell Crow principals Brian Hines and John Boyle, senior vice presidents Michael Dalton and Keith Gurtler, as well as Senior Associate Debbie Howertown.