Route 495 Submarket Wins Absorption Race

It also is the fifth consecutive quarter that the I-495 market experienced positive absorption. In the last 12 months alone, 616,000 sf of office space has been absorbed in the I-495 North submarket, with 325,000 sf of that absorption coming in the third quarter of 2005, the study found.

"It is by far the highest rate of recovery in Greater Boston so far," Brendan Carroll, a researcher with RBJ&P, tells GlobeSt.com. "Over the last three years, things have been improving. Now it looks like the recovery is sustainable."

Fueling the area's recovery is a surge in occupancy by technology hardware firms, which take up 34.6% of the submarket's occupied space. The dominance of technology hardware companies is so high that the submarket boasts the largest concentration of technology hardware companies in Greater Boston.

Yet despite the growing demand for class A office space by technology hardware firms, the submarket still has one of the area's highest vacancy rates at 28%, primarily because class B and C space have not benefited by the occupancy surge. Yet the submarket's 2.1% drop in vacancy since the prior quarter indicates that the I-495 North office sector is warming up, says Carroll. "It's notable for its positive momentum," he notes, "yet at the same time, there remains a plethora of vacant space."

While companies such as Draeger Medical Systems, which recently signedon to take 128,400 sf at 6 Andover Tech Center, and Northrop Grumman,which leased 80,903 sf at 100 Brickstone Square, both in Andover, aregobbling up class A space, vacancy rates remain high in the submarketbecause the surge has not yet trickled down to class B and C buildings, Carroll explains. That should happen as class A space tightens further, he adds.