It could get worse before it gets better, Grubb & Ellis suggests. "There's no end in sight to the market's current oversupply of space," according to its report. "Vacancy could exceed 20% as an additional 4.5 million sf of new or newly-renovated office product is added over the next four quarters."

That gives tenants three options, according to the company. They can negotiate a new deal in their current location, move up to better space or shop the market for a property owner willing to undercut the market to shore up occupancy.

There are some bright spots for property owners. For instance, vacancy in class-A office towers in Back Bay is a healthy 7.1%. While the second-largest submarket in the Central Business District benefited last year from the lease-up of the 855,000-sf 111 Huntington building, Prudential Center saw 111,000 sf of space leased in the first quarter.

Overall vacancy in Back Bay began the second quarter at 11.8%, slightly higher than the largest Central Business District submarket, the Financial District.

Despite higher vacancy and lower lease rates, Boston remains on the radar screen for investors, according to Grubb & Ellis. The company notes the John Hancock portfolio traded at $338 per sf, and a 15% vacancy at 101 Arch St. did not dissuade CB Richard Ellis from making the building its first acquisition in the market.

Grubb & Ellis reports that since 2000, class-A properties with vacancy rates less than 10% have commanded $244 per sf, while those above 10% have sold for $177 per sf. That study includes 49 buildings, which changed hands for a combined $4.6 billion.