Our July edition of Marketscape Monthly shows that Boston’s real estate fundamentals continue to improve. Net absorption through Q2 has already reached 75% of full year 2010 levels. At 19.8% total vacancy, the metro is inching its way off the cyclical peak of 22.5%. This is starting to translate into a return to rent growth.
Overall Boston is ahead of the nation in the recovery along with Silicon Valley, Houston, San Francisco and Denver, due to a similarly highly skilled workforce and a strong concentration in growth areas like high tech, healthcare and life sciences. Office-using employment here has recovered a quarter of losses seen in the recession so far representing an encouraging shift in momentum.
Certain submarkets are clearly outperforming others. For example, total vacancy reached a nadir of 8.4% in the Back Bay, a level not seen since the year 2000. While East Cambridge is dealing with Vertex’s relocation to the Seaport District, it looks forward to the return of now Weston-based Biogen. Rents are up approximately 10% year-over-year in both submarkets.