The Cambridge market has been a tale of two cities ever sincethe recent recession with an office market that was more vulnerableto the vagaries of the economy and a thriving biotech market. Butrecent numbers indicate that the office market is going toexperience further setbacks that will be evidenced in decliningrents while the biotech market's struggle to find financing couldbe reflected in its ability to fill its space.

According to CRESA Partners' tenant's guide for the fourthquarter of the year, 1.7 million sf of direct space is available inthe Cambridge office market, with an additional 570,000 sf ofsublease space. Of that sublease total, approximately 70% has aterm of three years or less.

Chris Crooks, a principal at CRESA Partners in Boston, where heheads the Cambridge market group, notes that that rents, whichpeaked at $70 per square foot for Class A office buildings in thethird quarter of 2000, now range from $25 to $36 per sf, and about$7 per sf less for Class B space. He says that rates are expectedto fall another 3% to 7% in the next six months on a direct basisand 5% to 10% on a sublease basis; rents should then remain flatuntil the end of 2004.