The report indicates that the overall suburban market, which totals 113.7 million sf of office, research and development space, ended the third quarter with a vacancy rate of 13.4% for direct space. When including the sublease space, the overall vacancy rate rises to 23%. At the end of last year, the overall vacancy was 17.3% and at the end of the second quarter, the vacancy was 21.8%. Net absorption year-to-date is negative 4.6 million sf.

Not surprisingly, there are very few new projects in the pipeline. The one exception is the new speculative 300,000-sf office building in Beverly being developed by Cummings Properties.

The report notes that demand in the area is very flat and there are many "significant projects both in the Route 495 and Route 128 markets that are having limited showing activity." The tenants that are in the market are dealing with upcoming lease expirations or are looking for the opportunity to upgrade space in a soft market.