Downtown Boston CRE market improves in third quarter
The market for office space in downtown Boston improved in the third quarter, according to a new report. Net absorption, a figure that indicates how much of the existing real estate inventory is being leased compared to the previous period, exceeded 262,000 square feet for the three months ended Sept. 30 and has reached almost 750,000 this year, according to CB Richard Ellis, a real estate brokerage. Average asking rents rose 40 cents to $40.88 per square foot, indicating continued market stabilization, the report said. Not all signs are rosy, though: The vacancy rate rose to 11.9% in the third quarter. "While non-traditional office space has garnered interest among out-of-market prospects, there remains a surplus of low-rise, commodity-type space in towers across the CBD, and limited growth within this segment," CBRE said. Meanwhile, the vacancy rate fell and lease rates rose in the suburban Boston office market, which registered negative net absorption of 114,000 square feet. Average asking rents were flat. "Despite select pockets of demand at the start of the quarter, there was a general slowing of lease velocity during the summer months perpetuated by uncertainty in the overall economy, stemming from the debt ceiling crisis and volatility in the stock market," the report said. Write to Liz Enochs.