Boston's commercial real estate market is showing early signs of a slowdown, but there is strength in all the overall fundamentals for a healthy market, the Boston Business Journal reported this week.

Despite the fact that some companies appear to be sitting tight and delaying any big office space moves until the situation with the economy shakes itself out, this emerging trend has not yet dented low office vacancy rates.

A roundup of third-quarter market surveys by local commercial real estate firms paint a picture of a still-tight office market with high rental rates. Possibly the strongest sector of the state's commercial real estate industry can be found in the downtown Boston market.

Meredith & Grew Inc., which has an office in Boston, reports office vacancy rates dipping below the 2 percent range in Back Bay and just above 3 percent in the Financial District.

Other surveys, by CB Richard Ellis/Whittier Partners, the Codman Co. Inc. and Cushman & Wakefield of Massachusetts Inc. found slightly higher--but still comparitively low--vacancy rates.

According to CB Richard Ellis/Whittier, Boston's business district, an area that includes the Financial District, had a vacancy rate of 4.5 percent, with Back Bay at just over 7 percent.

In its market survey, the Codman is expected to report a 4 percent office vacancy rate in downtown Boston for the third quarter.

And Cushman & Wakefield reports an overall 5.5 percent vacancy rate in Boston's business district.

"This is probably the lowest vacancy rate since the vacancy statistics became commonplace," said Ted Wheatley, a principal with the Codman.

Published: October 27, 1998

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