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EASTERN MASSACHUSETTS-A softening economy has begun to wreak havoc with the office market in this area but retail real estate in the suburban market shows little sign of slowing down. According to a study conducted by Burlington, MA-based Finard & Co. LLC, while there is some indication of a softening in the retail market here, its not significant. In fact, according to the study, vacancy rates have risen only slightly and leasing prices have leveled off. The study looked at eastern Massachusetts, excluding the city and inner suburbs, and found that retail vacancy rate for the area rose from 7.7% at the end of last year’s third quarter to 9% now. This area’s market is notorious for having high barriers to entry for retailers.

The study attributes the increased vacancy rates to the closing of Bradlees’ stores when the company went bankrupt. Most of those stores have since been recommitted to other retailers, many of whom will reopen them shortly. For office space, availability and condition of the property impact the market most, while for retail sites, the factors that most impact the market are how well a store can fare in that location. The fact that a number of retailers have plans to expand in the area–including Home Depot Inc., Kohl’s Corp., Lowe’s and Target Corp.–bodes well for the local economy. These types of retailers tend to pursue larger real estate sites.

Smaller retail locations are being pursued in some cases by lawyers and accountants because of the exposure, proximity to clients and the fact that these sites are generally less expensive than office space. The only sites, according to Finard & Co., where rental prices have dropped significantly are those with 10,000 sf to 25,000 sf.

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