Greater Boston’s office market shed more than 2.4 million square feet in occupied space during the first three months of 2009, according to data released Monday by CB Richard Ellis.
Boston’s office market alone suffered negative absorption of 1.3 million square feet. By comparison, negative absorption for the entire region’s office market in the fourth quarter of 2008 was just over 1.3 million square feet. Sublease inventory in Boston swelled by 500,000 square feet and marched north of 1.5 million square feet, according to CBRE. Average asking rents in the city fell by $5.73.
The picture was equally grim in the suburbs. The important Route 128 West submarket posted 682,000 square feet in negative absorption, and a 170,000 square foot uptick in sublease availability. Route 495 Northeast lost more than 241,000 square feet – a staggering amount, given the submarket’s overall size of 4.7 million square feet. Verizon recently vacated 130,000 square-feet at 20 Shattuck St. in Andover.
Cambridge’s office market also got hammered, posting 261,000 square feet of negative absorption in the first quarter of this year, after shedding nearly 290,000 square feet in the final three months of 2008.
Route 128 South, a submarket with 14.6 million square feet of total inventory, lost 60,000 square feet of occupied space. The area would have posted positive leasing gains, were it not for Blue Cross/Blue Shield’s 170,000 square-foot sublease availability in Quincy.
The pace of losses in East Cambridge’s lab market slowed, from a 107,000-square-foot loss in Q4 2008 to a 56,000-square-foot loss to begin 2009. The submarket saw a $4 drop in asking rents, to $52.47.
CBRE’s data does highlight a few bright spots. Route 3 North posted nearly 200,000 square feet in positive absorption, after gaining more than 155,000 square feet at the close of 2008. Asking rents in the submarket held steady, at $16.54. Gains were paced by L-1 Identity solutions (a 91,000 square-foot renewal and expansion at 296 Concord Rd., Billerica), Covidien (70,000 square-feet at 15 Crosby Dr., Bedford) and e-Dialog (47,000 square-feet at 65 Network Dr., Burlington). Likewise, Framingham-Natick saw 65,000 square feet of gains, with minimal rent depreciation.
