A mixed bag. That’s the outlook for commercial real estate next year.

“Last year we wondered how long the investment sales volume would continue and now we know,” said Hans Nordby, research strategist at Property & Portfolio Research Inc. “Housing is a train wreck, home construction is in the tank and there’s limited job growth, factors that are holding us back. It’s the opposite of what we had five years ago.”

Nordby and five commercial executives delivered predictions for 2008 to a packed crowd at the Seaport Hotel in Boston last week. The event, held by the Boston chapters of the National Association of Industrial and Office Properties and Society of Industrial and Office Realtors, revealed good news for some office and industrial market sectors while noting the slowdown from the torrid sales of earlier this year.

Brian T. Hines, a partner at DTZ FHO Partners, noted that the 125 million-square-foot suburban office and research & development market along Route 128 has a vacancy rate of 17 percent, while the Interstate 495 North market vacancy stands at 25 percent.

“In 2003, we hit bottom when the vacancy rate was 29 percent and that was a staggering number,” he said. “So we’ve come a long way.”

The absorption rate, the amount of space that is leased annually, has been 1 million square feet in Boston’s suburban market for the last decade, Hines noted. “It sounds low and it is,” he said. “The reason is we got hammered in 2001 and 2002 Â… was a negative 9 million square feet of space of absorption. It’s hard to play catch-up with those numbers.”

Still, the year-to-date absorption rate in the suburbs is 2.4 million square feet and on track to reach 3 million square feet of space by the close of 2007, he added. Hines sees more good news ahead because demand is rising as tenants get priced out of Boston and Cambridge. More than a dozen companies are seeking space, including Raytheon, National Grid, Shire, VistaPrint and Phase Forward. Suburban office and R&D rents are in the $20 to $40 range per square foot, Hines said.

Tenants who want new quarters with a suburban address will have lots to choose from next year, Hines noted. Under construction is 77 City Point in Waltham with 200,000 square feet of space expected to become available next spring. Trade Center West, a 400,000-square-foot campus on Route 128 in Woburn also will be ready for occupancy in the spring; 850 Winter St./Reservoir Woods in Waltham at 185,000 square feet will be complete early next year; Braintree Hill Office Park will feature 160,000 square feet of space; and the site is being cleared at 5 Wall St. in Burlington for a 175,000 square foot building. Overlook Center in Waltham is slated to be 100,000 square feet and 1560 Trapelo Road in Waltham will offer 65,000 square feet of space.

Mark Winters, executive director at Cushman & Wakefield, said there’s lots of debate in his office about where the market is headed. “We are evenly divided between bulls and bears,” he said. “The bears point out that demand has slowed while the bulls say the sellers’ markets fundamentals are sound. It will be a while before we see which of the two have the greatest impact on the market.”

Winters noted that the Cambridge market overall has 10 million square feet of office and 7.5 million square feet of laboratory space. Vacancy rates are at 10 percent in both, he said. While there has been little new construction of office space for five years, two labs opened in 2007 with 600,000 square feet of space at 200 Technology Square and 301 Binney St.

“Cambridge has competed globally for 1.7 million square feet [of potential laboratory space tenants] and captured 1.6 million,” he said. “Cambridge’s success has been pretty incredible.”

Among the companies leasing space this year are Novartis Pharmaceuticals Corp., Schlumberger and the Broad Institute. Cambridge and its chief draw of the Massachusetts Institute of Technology failed to get to Energy Biosciences Institute, which ended up settling near the University of California at Berkeley, Winters said.

Robert Gibson, a partner at CB Richard Ellis/New England, who spoke about the industrial market, said availability, asking rents, cap rates, broker incentives and investors are up. But total absorption, average tenant size, available zoned land, quality options to lease, new construction and broker optimism are down.

What’s flat? Property values, construction costs and tenant velocity, or signed lease activity, said Gibson, whose company tracks 134 million square feet of industrial space. The Boston area vacancy rate is 16 percent or 21 million square feet.

Balance Levels

Kristin Blount, a partner at Meredith & Grew, said while the headlines screamed “credit crunch, stock market volatility, issues on Wall Street, rising energy costs,” Boston’s story was different. “The downtown data is strong, with single-digit vacancy rates, healthy net absorption and rising rents,” she said.

Blount cited a survey of Class A office space in Boston with 20 or more stories that reported a 2.6 percent vacancy rate this year at or above the 20th floor. Below the 20th floor, the vacancy rate is 4.5 percent, she said.

New inventory under construction in the downtown includes Russia Wharf, Two Financial Center and Fan Pier, she noted. The Hines project for South Station, 111 Federal St., One Franklin and 888 Boylston St. could be under way soon, she added.

“We are cautiously optimistic about the Boston market next year,” she said. “Fundamentals are strong and we have not seen any slowdown to date, but we are seeing some leveling of demand with recent economic news. Rents should rise moderately, particularly in the Class A market where scarcity continues.”

Michael G. Smith, managing director of Jones Lang LaSalle, said 2007 was an amazing year for commercial real estate transactions in the Greater Boston area.

“Total sales in the first six months of 2007 have eclipsed the 2006 volume, which in itself was a record at $6.5 billion,” he said. “This year was probably the most unprecedented sellers’ market that I’ve ever experienced … the balance was out of whack Â… but there has been a huge drop-off in overall activity lately.”

Today, he said, buyers are behaving like middle school students at a dance. “Buyers are making fewer bids with wider ranges because no one wants to get up too soon and make fools of themselves because they don’t know where the market is.”

The market shift came fast and shifted dramatically, Smith said. He predicted a much more even market with an end to outlandish bids going forward. “We forecast a much more balanced bid process where buyers have a little leverage,” he said. “It will represent a better buying opportunity for more players Â… Game on.”