Commercial real estate market conditions for Greater Boston during the third quarter continued to stabilize, according to a recent report from Boston-based commercial real estate services firm FHO Partners.
Leasing activity modestly picked up and fears of a double-dip recession are dissipating, according to a statement. Absorption is still negative across most submarkets, but availability rates are beginning to decline.
"As the key Q3 indicators demonstrate, the commercial real estate recovery we’re currently experiencing in Greater Boston will be more measured and far less meteoric than past economic rebounds," said FHO Partners Managing Partner Joe Fallon. "That said, things are beginning to move in the right direction."
Net absorption for Boston remains negative with 485,248 square feet vacated year-to-date, according to the report. However, this is an improvement over the same time period last year, when absorption totaled negative 1.81 million square feet year-to-date.
Overall availability in Boston is down 20 basis points quarter-over-quarter to 18.7 percent, but still up from both year-end 2009 (16.9 percent) and the third quarter 2009 (16.4 percent). Overall asking rents are also down 7.2 percent year-over-year, to $39.75 per square foot.
The Cambridge office market closed the third quarter with a 15.2 percent availability rate, according to the report. This is a decline of 1.6 percentage points quarter-over-quarter.
Overall asking rents for Cambridge office space averaged $35.65 per square foot, a decline of 7.2 percent in the past year. Year-to-date absorption was positive for lab and office space in the third quarter at 37,790 square feet and 338,229 square feet, respectively.
The suburban office market posted positive net absorption of 577,365 square feet year-to-date, according to the report. This is an improvement over a year ago when year-to-date absorption totaled negative 1.35 million square feet.
Overall availability in the suburban office market remained mostly unchanged quarter-over-quarter, increasing 30 basis points to 23.3 percent. Average asking rents for both office and research and development space remained flat quarter-over-quarter, but have declined 7.2 percent and 4.1 percent, respectively in the past year.
