The firm anticipates that the market is reaching its bottom and has begun what it calls a "potentially long process" of recovery. The report also indicates that the market will realize several trends, such as tenants seeking concessions from landlords, an increase in corporations purchasing buildings, tenants exploring the market for deals well in advance of leases expiring and a flight of tenants to more desirable submarkets that may have been too costly previously.

According to the report, the overall downtown Boston office vacancy rate, which includes direct and sublease vacancy, is at 10.4% and the availability rate at 17.4%, representing more than one million sf of negative absorption over the first half of 2003. The overall vacancy rate for the Cambridge office market is at 16.9% and the availability rate at 24.3%. The overall vacancy rate is a 33% increase compared to 12.6% at mid-year 2002.

The overall suburban office market, combining Route 128, I-495 and the inner suburban areas, is experiencing 22.7% overall vacancy and 29.1% availability rate, with the Route 495 office market particularly hard hit with a 26% overall vacancy and 32% availability.

"Our research indicates that the worst may be behind us and that the market is showing signs of recovery," says Michael Joyce, principal at Richards Barry Joyce & Partners.