BOSTON--Colliers International released its quarterly report, which provides occupancy and absorption statistics for the Boston, Cambridge and Suburban Boston markets, and highlights recent lease transactions as well as trends in the capital and investment markets.
The market recognized over 2.8 million square feet of positive absorption in 2012, its strongest showing since 2007. The vacancy rate declined from 18.4% to 17.0% over the course of the year and select submarkets began to report rent increases.
The fourth quarter represents the seventh consecutive quarter of positive absorption in the Boston market, dropping the vacancy rate to 13.1%. The strength of the recovery in the Financial District was particularly notable in 2012, with nearly 1.4 million square feet of positive absorption the most for the submarket in over 20 years.
The East Cambridge, lab market recorded nearly 500,000 square feet of positive absorption in 2012, causing the vacancy rate to decline from 17.0% to 10.9%. Construction activity is brisk with build-to-suits totaling 1.8 million square feet under construction and another .5 million square feet in the immediate pipeline.Annual absorption in the suburban office and R&D markets surpassed both 2010 and 2011 levels and the vacancy rate dipped below the 20% mark for the first time since early 2009.
As business and consumer confidence has slowly but steadily improved, tenants have been more willing to transact and to consider relocations and expansions than they were 12 or 24 months ago.Improved fundamentals in the leasing markets has encouraged investors to be increasingly willing to move beyond traditional core markets. Although aggregate sales volume of $4.5 million in 2012 was below 2011 levels, there was a notable increase in sales volume in the suburban sector during the year.