JLL's mid-year survey belies industry accounts that the suburbanmarket of 80.3 million sf is engaged in a full-fledged rebound, anotion leading to new construction and a crush of capital chasingsuburban properties. Although rents do continue to rise, enticingthis week's groundbreaking on yet another speculative officebuilding in Waltham, the core Route 128/Massachusetts Turnpike thatthe city anchors actually saw vacancies return to double figures(10.2%) at mid-year after dipping to 9.1% in the first quarter.Save for 259,000 sf of negative absorption for the south region,Route 128/Mass Pike has had the roughest 2007 of any regionalsubmarket, registering minus 172,000 sf of absorption at mid-year.Even so, average asking rents there crested $30 per sf in thesecond quarter to lead the pack, and the vacancy rate remains thelowest of any submarket despite having the most inventory at 19million sf.

Boston's worst performance occurred in the Interstate 495/MassPike submarket, with 155,000 sf of negative absorption in thesecond quarter to edge vacancy for the 12 million sf inventory upto 14.3%. Rents, however, rose slightly from the first quarter,hitting $20.30 per sf from $20.23 per sf. The overall suburbanaverage increased to $21.82 from $21.11 per sf to end the firstquarter.

For all the statistical angst found on the fringes ofmetropolitan Boston, JLL validated hyperbole about the Downtownresurgence. All six submarkets posted positive absorption in thesecond quarter, paced by robust Financial District leasing thatyielded 307,000 sf of Boston's total positive absorption of 490,000sf. Vacancy for the 33.6-million-sf district is down to 8 %, andthe average asking rate now tops $50 per sf at $50.23 per sf. Theaverage asking rate for Boston's inventory of 58.3 million sf hasalso seen impressive growth, rising to $46.67 per sf after endingthe first quarter at $41.07.

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