Colliers International Boston is pleased to release the Fourth Quarter Market Viewpoint including commentary on the greater Boston office and R&D markets as well as notable sales transactions.
This has been a year of ups and downs in the Boston market. Vacancies moved up 2.3 percentage points to 11.3%, sublease vacancy increased by two-thirds to 967,640 SF, and total absorption ended the year in the red. Despite that backdrop, landlords have continued to push rents, by 6.5% throughout 2016, and hundreds of tenants are touring for space. Creating optimism going into 2017, the fourth quarter posted positive absorption for the first time since year-end 2015.
The Cambridge office and lab market is just as hot as ever. The fourth quarter was a mixed bag, as depending on how the data is sliced, different stories emerge. Overall vacancies moved up over the third quarter’s rock-bottom levels but are 0.3 percentage points below year-end 2015 stats. Sublease space nearly doubled over the quarter, as firms such as GlaxoSmithKline put space on the market. There is twice as much sublease space on the market as direct space. Direct vacancies didn’t move, as properties remain essentially full.
The suburban market ended the year on a positive note, with 61,000 SF of net absorption in the fourth quarter and the annual total pushing 1.7 million SF. Total absorption was about 25% below 2015’s showing, though it remained well above the average absorption of this economic cycle (1.15 million SF). Performance varied widely between submarkets and also between cities and towns.