"Landlords are experiencing a pricing power they have not seensince 2001," Richards Barry Joyce & Partners research directorBrendan Carroll tells GlobeSt.com, as demonstrated in theBurlington/Woburn submarket. A year ago, the highest class A askingrents in Waltham was 33% above that found in Burlington/Woburn,$35.50 per sf to $26.75 per sf. That figure now has been whittleddown to 11%, $40 per sf to $36 per sf.<p.Rental rates for theentire suburban Boston office market have increased from $23.57 persf a year ago to $25.26 per sf now, while the overall vacancy ratehas finally dropped below 20%, from 21.6% after the first quarterof 2006 to 19.3%, reports officeSTATus. Carroll calls those figures"the most landlord-friendly" in the suburbs since the end of 2002.Net absorption for the quarter was 472,000 sf, headlined by a180,000-sf expansion by Bose Corp. in Westborough.

Nearly all of the positive absorption for the quarter was in theInterstate 495 West market where Westborough is located, good newsfor a submarket that suffered mightily following the recession thatgripped Massachusetts beginning in 2001. Once hitting 30%, thevacancy rate in the 16.7-million-sf submarket has gone from 27.9%13 quarters ago to 17.9%, with the mark down from 21% one year ago,says RBJ. "It has been very a solid year for 495 West," concursCarroll, who reports that the asking rent is now at $20.82 per sf,a gain from $19.27 per sf after the first quarter of 2006.

Due largely to appreciation in the core community, the chasm inpricing has actually accelerated between Waltham and I-495 West toa 37% difference in average asking rents, up from just 20% twoyears prior. As a result, says Carroll, price-sensitive tenants arenow looking at the outer fringe markets for relief, helping to spurthe greater activity around the edges. Since the recovery began inWaltham in late 2003, there has been two million sf of absorptionin Route 128 West, but 4.1 million sf in the abutting submarketssuch as I-495W, Burlington/Woburn and south on Route 128 in suchcommunities as Canton, Dedham, Norwood and Westwood. Besides theimproving economy, Carroll attributes that velocity to the tighterinventory and higher pricing now found in Route 128 West.