Office Vacancy Along 495 Ticks Slightly Upward In Q2 | Brokers say new construction being snapped up rapidly
Office vacancy increased 0.2 percent to 21.4 percent around Interstate 495 during the second quarter, according to Richards Barry Joyce & Partners, a Boston-based commercial real estate firm.
According to RBJ, Class A asking lease rates along I-495 decreased by $0.04 to $21.87 during the same period.
Negative Absorption
Although vacancy increased, mostly because of construction, more tenants moved into space than left space during the quarter. RBJ said absorption was positive for the seventh consecutive quarter on the I-495 corridor.
However, Framingham posted negative absorption numbers, meaning more office space became vacant than was leased, and RBJ said that is the result of the town’s “lack of tenant choices combined with high relative pricing.”
Class A and Class B lease pricing dipped slightly in the boroughs during the quarter, RBJ said.
According to RBJ, the I-495 area tracked closely with the rest of Greater Boston during the quarter. Greater Boston’s office vacancy increased from 13.2 percent to 13.6 percent.
The same kind of negative absorption seen in Framingham was also apparent in Cambridge. RBJ said Cambridge’s difficulties in attracting tenants to take vacant space “was symptomatic of a lack of tenant choice and rapidly escalating lease rates at existing facilities.” Cambridge’s vacancy rate increased from 7.1 percent to 7.6 percent in the quarter.
Class A space in Cambridge was leasing for $53 per square foot during the quarter, RBJ said and have been at that level for nearly a year. Class A lease rates around I-495 were slightly less than $22 per square foot and have been on a downward trend since the second quarter of 2007.
Vacancy in the Route 128 corridor increased by 0.4 percent to 16.2 percent as 637,000 square feet of new space was completed. The new space drove vacancy up despite absorption of 302,000 square feet. So far this year, 1.2 million square feet of new space has come online in the Route 128 corridor, the most since the first half of 1999, RBJ said.
The 495 region is still a steal compared to Boston, where average asking lease rates are $39.54 per square foot. Boston’s vacancy rate is also on the upswing and now stands at 13.6 percent.
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