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By Greg Turner, Boston Herald
McClatchy-Tribune Information Services
Dec. 21–Greater Boston’s office market is wrapping up its best year since 2007, driven by strong leasing demand in the Financial and Seaport districts, a new industry report shows.
Tenants gobbled up 2.6 million square feet of space in 2012, the most in five years, and the vacancy rate has ticked down to 14.4 percent, from nearly 15 percent, according to real estate advisory firm Richards Barry Joyce Partners.
“That’s true growth in the markets,” said RBJ president Bob Richards, who also credited the tech industry with carrying the load while other cities suffered through economic doldrums. “It definitely translates to jobs.”
Google and Microsoft have been expanding operations in Cambridge, and Amazon.com is on its way into a 105,000-square-foot space in Kendall Square.
“It’s scary to think where the Greater Boston market would be without technology — including life sciences,” Richards said. “If we were still operating as a non-headquarters, back-office market … these numbers would be dramatically different.”
The Financial District, where tenants have been finding value in low-rise buildings, and the Seaport District, which has become a magnet for moving Cambridge firms, together accounted for 42 percent of the year’s leasing activity.
Burlington was the big winner in the suburban office market, outpacing the traditional premium outpost of Waltham, where leasing activity went south.
“Suburban-minded tenants are really attracted to the amenity-rich environment that Burlington has become,” said Brendan Carroll, RBJ’s senior vice president of research.
The town, where Route 128 meets Route 3, also offers tenants a rent “discount,” with rates averaging $27 a square foot compared to Waltham’s $32, he said.
The office construction pipeline stands at 2.3 million square feet, up from 200,000 six quarters ago.
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(c)2012 Boston Herald
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