Boston Office Vacancy Down at Year’s End
ABG Commercial Advisors Q4 Boston Office Market Report
At the end of last year, Boston’s Office market finished the fourth quarter with a vacancy rate of 9.6%, down from the third quarter numbers of 9.8%. While the absorption rate is down from third to fourth quarter, rental rates showed a slight increase. Furthermore, vacant sublease office space has continued its steady increase from the beginning of the year.
Net absorption for the overall Boston office market concluded the quarter at positive 1,042,391 square feet, compared to 1,966,407 square feet absorbed in the third quarter. Class-A, Class-B, and Class-C buildings all recorded positive absorption, with Boston’s central business district seeing negative absorption. Net absorption for suburban markets was also positive.
The amount of vacant sublease space increased yet again by the end of the fourth quarter 2013, recorded at 2,331,013 square feet by year’s end, up from 2,041,843 square feet at the end of the third quarter. This consistent increase in sublease space after each quarter shows that Boston office space is continuing to develop at an expeditious rate.
Average quoted asking rental rates for available Boston office space was $21.11 per square foot at the end of the fourth quarter 2013. This represents a 1.8% increase in quoted rental rates from the end of the third quarter, when rents were reported at $20.73 per square foot. Class-A and Class-C buildings saw a slight decrease in rental rates while rates for Class-B buildings increased.
Five buildings totaling 641,429 square feet were completed in the Boston-area office market during the fourth quarter 2013. Two very notable 2013 deliveries include 157 Berkeley St, the new world headquarters for Liberty Mutual Insurance, and 225 Binney Street, home of biotech giant Biogen Idec. (Costar)