JLL's Bekarian and CBRE principal Curtis Cole explain that the largest blocks taken down in 2007 were never factored into the statistics because the space involved was not being marketed. Monitor Corp., for example, renewed for nearly 200,000 sf at 2 Canal Park after threatening to depart the city altogether, while a 250,000-sf lease renewal and expansion by Akamai at 4 and 8 Cambridge Center also was struck before the space went up for grabs. The blockbuster 175,000 sf Microsoft lease at One Memorial Dr. was another off-market phenomenon, partly because the landlord allegedly muscled in on tenant options reserved for existing occupants.

The latter issue provided a bit of melodrama to the Cambridge leasing scene in 2007, but Bekarian says the greater effect was a boost for the stature of the city as a prime business address. Coupled with the arrival of Google to Kendall Square, the Internet powerhouses willing to pay upwards of $72 per sf "helped the psychology of the market," relays Bekarian, and further pared down the availability. CBRE puts the office vacancy rate in Cambridge at a slim 6.8% versus 7.3% for JLL. DTZ FHO posts a 10.2% rate for the 9.7 million sf in its Cambridge survey.

Cole characterizes the office market in 2007 as a "moderate" year, concurring that the high-power arrivals were welcomed and relaying that buildings offering space improved their position thanks to the dearth of supply and "significant" accretion of rents. "There are many happy landlords out there," he says. CBRE lists the average asking rent in Cambridge at $44.78 per sf, compared to $52.69 in the JLL review. DTZ FHO puts the mark at $40.24 per sf, well up from the $31.69 per sf the firm recorded at year-end 2006.

For all the variant results, the surveys share one particularly alarming figure for office tenants—zero sf of new construction underway. Unlike most communities, the price of laboratory facilities in Cambridge is so compelling that new development sites are almost exclusively being reserved for that function. Potential beneficiaries includes the Alewife district in west Cambridge, a submarket that has struggled but one that Cole says offers a solution for firms that want to retain the Cambridge address but have room for growth and a bit of rental relief. CBRE puts the average rent in Alewife at $38.04 per sf, more than $10 per sf below the East Cambridge rate of $48.53 per sf. "It is positioned to do well in 2008," says Cole, perhaps indicated by 22,000 sf of positive absorption in the fourth quarter, making Alewife the only Cambridge submarket to enjoy a gain in that period.

CBRE revealed an especially harsh final frame for the lab market, which posted negative 112,000 sf to dilute the 2007 figure down to positive 118,000 sf. Cole cites new supply as a key reason for the drop, although he concurs that the pace of leasing fell off for both office and lab late.

As with Cole, Bekarian accedes that Cambridge developers favor laboratory, but says the increasing office rents and lack of competition might entice some new construction. In the meantime, class B properties stand to benefit from the skyrocketing class A rates, he says, although 2007 absorption was in the red for such buildings by 110,000 sf. Nearly 700,000 sf of class B space is fallow in Cambridge, according to JLL, and Bekarian says those buildings could accommodate most company needs. "At the end of the day, Cambridge is still a small-tenant market," he says. JLL estimates a class B asking rent of $45.89 per sf compared to a $58.26 per sf average for class A.