GREATER BOSTON MARKET VIEWPOINT · percentage point in 2011—from 16.8% to 15.8%—as over 600,000...

GREATER BOSTONMARKET VIEWPOINT4TH QUARTER 2011

Accelerating success.

The vacancy rate in the Boston offi ce market dropped one percentage point in 2011—from 16.8% to 15.8%—as over 600,000 square feet of positive absorption was recorded. Although the recovery has occurred at a more gradual pace than most market observers would like, the fact that this follows three consecutive years of negative absorption is a signal that market conditions are stabilizing.

The performance gap between the Financial District and Back Bay submarkets persists, with vacancy rates of 19.4% and 6.2%, respectively. There are even fewer options for Class A space in the Back Bay, where the vacancy rate is 4.8% at year-end.

Key statistics at the end of 2011 include:

MarketSupply SF

(000s)Vacancy

Rate2011 Absorption

SF (000s)

Total Boston* 60,562 15.8% 608

Back Bay 11,982 6.2% 298

Financial District 33,597 19.4% 39

Charlestown 2,707 8.5% 77

Crosstown 1,122 6.3% 16

Fenway/Kenmore 1,826 13.6% (46)

North Station 1,882 14.5% 73

Seaport 6,262 19.5% 178

South Station 1,184 23.6% (27)

* includes sublease space

SUPPLY AND DEMAND

Supply totals over 60 million square feet, with 45.6 million square feet or 75%, located in the core Financial District and Back Bay submarkets.

• At the end of the fourth quarter there were approximately 120 tenants in the market seeking an aggregate of over 4 million square feet of offi ce space. Although the median requirement is 12,000 square feet, some of the larger requirements include:

Tenant SF Industry

State Street Bank 1,000,000 Financial Services

Blue Cross Blue Shield of Massachusetts

350,000 Health Care/Medical

Brown Brothers Harriman 300,000 Financial Services

Mintz Levin 225,000 Legal

Lexington Insurance 175,000 Insurance

Cambridge Associates 150,000 Investment Advisory

Iron Mountain 100,000 Information Management Services

VELOCITY

• Velocity (signed lease activity) totaled over 4 million square feet in 2011, and was largely dominated by Vertex Pharmaceutical’s second quarter lease for 1.1 million square feet of build-to-suit offi ce and lab space at the Fan Pier development.

• With the exception of the Vertex lease and Pioneer Investments’ third quarter renewal for 125,000 square feet at 60 State Street, the remainder of leases executed in 2011 were less than 100,000 square feet in size.

• Although the economic recovery has been gradual and growth from Boston’s existing tenant base was modest during the year, it is notable that there were more than 20 companies totaling over 1.5 million square feet that migrated to the Boston market from Cambridge or suburban locations in 2011. These ranged in size from less than 5,000 square feet to the Vertex transaction, with some of the larger companies including:

Tenant Prior Location New Location SF

Vertex Pharmaceuticals Cambridge Seaport 1,100,000

Brightcove Cambridge Financial District 80,000

CBIZ Tofi as Cambridge Back Bay 40,000

Jones Day New to Market Financial District 35,000

Allen & Gerritsen Watertown Seaport 33,200

Finnegan Henderson, Farabow, Garret & Dunner Cambridge Seaport 33,000

W2 Racepoint Waltham Financial District 32,000

Heartland Robotics Cambridge Seaport 18,400

Latham & Watkins New to Market Back Bay 18,000

Elysium Digital Cambridge Financial District 18,000

ABSORPTION AND VACANCY

• The Back Bay outperformed the rest of the market in 2011, and this was particularly true for Class A buildings.

• The Seaport District also had a strong showing in 2011, with nearly 180,000 square feet of positive absorption. This was split almost evenly between the Class A and Class B segments of the submarket and driven in large part by an infl ux of new tenants from Cambridge and the suburbs. The City is promoting the submarket as the “Innovation District” and cites over 90 new businesses moving to the area since the initiative was launched in 2010.

MARKET VIEWPOINT | Q4 2011

p. 2 | Colliers International

Boston Overview

• Assuming relatively modest absorption over the next few years, the vacancy rate will likely remain above 10% for the overall market through the 2015 forecast period. Back Bay will likely remain the statistical exception, with single-digit vacancy rates. The projection includes the addition of 1.7 million square feet to the offi ce supply in 2013, representing Liberty Mutual’s new headquarters in the Back Bay and the two Vertex buildings in the Seaport District.

RENTAL RATES

• Average asking rents have been relatively fl at since the latter half of 2010, but are beginning to show some incremental growth in certain segments of the market. Back Bay landlords began to push rental rates during the fourth quarter for Class A and Class B buildings. The Seaport District and select Financial District properties, particularly high-rise tower locations are also beginning to see some moderate growth in rents.

• Rents have stabilized in the Financial District, but a surplus of low-rise space in the Class A towers is subduing rental growth in this segment of the market.

The spread between asking rents in various segments of the market is depicted in the following table.

Space Type Rental Range/SF

Class A – high rise $55 - $75

Class A – mid rise $45 - $55

Class A – low rise $40 - $45

Class B $25 - $35

TRENDS

• The vacancy rate peaked in 2010, and should gradually decline over the next few years.

• Positive absorption is anticipated over the 2012-2015 forecast period.

• Tenant interest in the Seaport “Innovation” District will remain strong in 2012.

• “Less is more” as tenants focus on reduced occupancy costs and improved effi ciency.

• Rents will continue to be segmented between various classes of space.

Projected Vacancy & Absorption

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Back BayVacancy Rate

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Colliers International | p. 3 CONTACT: Mary Sullivan Kelly | [email protected]

Cambridge was an active market in 2011, riding a dual wave of growth from life sciences and technology companies. The city has long been acknowledged as a global hub for these sectors, but the attraction of the Kendall Square area has never been more evident than over the past year with pharmaceutical and biotechnology leaders and technology giants making signifi cant lease commitments for new space as they try to gain greater access to the resources and infrastructure surrounding MIT, and as they look to tap into one of the most talented and deep labor pools in the world.

The life sciences sector is driving signifi cant new building in East Cambridge, with eight buildings totaling just under 2 million square feet under construction—the most new lab and offi ce space under construction in the market at a given time since 2000. In total, over 2 million square feet of new leases were signed during the year, including 1.4 million square feet of build-to-suits for life sciences organizations.

The vacancy rate in Cambridge’s 19.8-million-square-foot offi ce and lab market dropped from 14.1% to 12.9% over the course of 2011 with 217,730 square feet of positive absorption, 196,980 square feet of which occurred during the fourth quarter. Not yet refl ected in the statistics is the positive absorption related to the build-to-suit lease activity described above, which will be recorded upon completion of the buildings.

Key statistics at the end of 2011 include:

MarketSupply SF

(000s)Vacancy

Rate

Absorption SF (000s)

Q4 2011 YTD

Total Cambridge* 19,813 12.9% 197 218

Offi ce 10,256 10.0% 83 244

Lab 8,774 17.0% 110 (42)

* includes R&D space

OFFICE MARKET

The vacancy rate in the 10.3-million-square-foot offi ce market dropped from 13.3% to 10.0% over the course of 2011, as a result of 244,000 square feet of positive absorption. While these are relatively healthy statistics from a landlord’s point of view, segments of the market, such as East Cambridge/Kendall Square are even tighter than the vacancy rate would imply, as there are several leases pending and much of the available space is in one building, RREEF’s 101 Main Street.

Velocity (signed lease activity) totaled over 1.3 million square feet during 2011. Large pharmaceutical and biotech companies were

the most signifi cant drivers of velocity, accounting for over 600,000 square feet, followed by technology companies with approximately 350,000 square feet.

The largest leases signed during 2011 are listed below:

Tenant Address SF

Biogen Idec 241 Binney Street (bts) 300,000

Biogen Idec 17 Cambridge Center (bts) 190,000

Pegasystems One Rogers Street (r) (e) 160,000

Google 4 Cambridge Center (e) 80,000

Google 3 Cambridge Center (e) 60,000

(bts) build-to-suit (r) relocation (e) expansion

Demand during the year was driven by larger, strong-credit companies and institutions such as Google, Genzyme/Sanofi , Nokia, Millennium and MIT, contributing to pockets of extreme tightness in the Kendall Square submarket. At the close of 2011 tenants in the market totaled approximately 410,000 square feet of demand.

The tight supply and high rents have forced many younger, cost-conscious technology companies to consider offi ce options outside of East Cambridge, with the up and coming “Innovation District” in Boston’s Seaport area being the most popular alternative. Below is a list of notable East Cambridge companies that moved, or are seriously considering a move, to Boston’s Seaport District.

Tenant SF Status

Brightcove 80,000 Atlantic Wharf

Zip Car 45,000 Active

SCVNGR 30,000 Signed LOI

ChoiceStream 18,000 Active

famaPR 10,000 Liberty Wharf

Rents, which had been fairly steady for the fi rst three quarters of 2011, spiked during the fourth quarter with top of the market asking rents moving from $48-50 per square foot to $55 per square foot almost overnight. Generally, asking rents in East Cambridge are up 12 to 24% compared to a year ago, depending on the building.

Direct Asking Rents PSF

Space Type - Location Q4 2009 Q4 2010 Q4 2011

Class A – East Cambridge $30-$45 $35-$48 $40 - $57

Class B – East Cambridge $28-$33 $30-$35 $35 - $40

Class A – Alewife $24-$28 $24-$28 $26 - $35



Cambridge Overview

LAB MARKET

The 8.8-million-square-foot lab market fi nished 2011 with a deceivingly high vacancy rate of 17.0%, down from the third quarter rate of 19.4%, but higher than the year-end 2010 rate of 15.1%. Although the year ended on a positive note with positive absorption in the fourth quarter of 110,000 square feet, absorption was negative 42,000 square feet for the year. While the statistics seem indicative of an uneventful year, they do not present a full measure of the current market activity, as the 1.1 million square feet of lab space under construction will not be accounted for until construction completion occurs.

For the fi rst time in many years, the availability of Class A existing lab space increased, giving tenants multiple options. Even more Class A space can be expected to become available over the next two years when Vertex vacates its approximately 600,000 square feet and some other signifi cant leases are not renewed. The chart below depicts the breakdown of available lab space by type and quality.

Space Type SF Available % of Available Space

Class A “Biotech-Ready” Shell 754,000 50%

Class A Existing Lab 389,000 26%

Class B Existing Lab 205,000 14%

Obsolete Lab 152,000 10%

Totals 1,500,000 100%

Transaction velocity in the lab market totaled approximately 1,450,000 square feet during 2011, over 1 million square feet of which represented growth.

Two signifi cant build-to-suit lab leases were signed in 2011. The largest transaction was the Broad Institute’s ground lease for a 250,000-square-foot build-to-suit research facility located physically adjacent and connected to the Broad’s headquarters. But perhaps the most notable transaction was Pfi zer’s build-to-suit lease for 184,000 square feet with MIT at 610 Main Street on the Osborne Triangle. Pfi zer plans to move signifi cant research operations from its company-owned Groton, Connecticut campus to a site that is essentially on the MIT campus.

In addition to these build-to-suit leases, Novartis started construction on two new lab and offi ce buildings totaling approximately 600,000 square feet on land that it leases from MIT, also located on the Osborne Triangle, at 181 Massachusetts Avenue and 22 Windsor Street.

The largest lab leases signed during the year follow:

Tenant Address SF

Broad Institute 75 Ames Street 250,000 (bts)

Pfi zer 610 Main Street 184,000 (bts)

Vertex Pharmaceuticals 88 Sidney Street 145,300 (r)

Quest Diagnostics 415 Massachusetts Avenue 114,000 (r)

Ariad 26 Landsdowne 100,400 (r)

Pfi zer 700 Main Street 100,000

(bts) build-to-suit (r) relocation

At the close of 2011, tenants in the market represented approximately 1.2 million square feet of demand driven primarily by larger, emerging biotech and pharma users. As was the case throughout 2011, demand from small- to medium-sized biotech companies remains relatively light.

Tenants seeking and willing to pay for Class A lab space have the most options in the Cambridge market. Younger biotech companies looking to fi nd rents in the $40s psf NNN range and below have fewer options (3 existing lab, 2 shell), with most of the options having sat vacant for several years. These dynamics have forced many of the early- to mid-stage companies to consider suburban alternatives. While not near the levels experienced in the past, mainly due to the lack of activity in this segment of the market, there were a handful of younger biotech companies (Forma Therapeutics, Quanterix, Blend Biosciences) that relocated to the suburbs in search of lower priced options. Larger tenants (150,000 to 300,000 square feet +) in East-Mid Cambridge able to wait up to 24 months for delivery have ten options (4 existing lab, 1 shell, 5 build-to-suit) with six diff erent landlords.

The spread between asking rents in various segments of the market is depicted below:

Direct Asking Rents PSF, NNN

Space Type - Location Q4 2011

Class A Existing - East Cambridge $50 - $65

Class A Shell - East Cambridge $58 - $70

Class B Existing/Shell - East Cambridge $35 - $48

Class B Existing – Alewife $28 - $35

TRENDS

• The time is now for a speculative offi ce building in Kendall Square.

• There will be greater availability of existing Class A lab space over the next two plus years.

• Expect more build-to-suit activity from life science companies.



The suburban Boston offi ce and R&D market was statistically fl at in 2011, with the vacancy rate virtually unchanged over the course of the year, closing the fourth quarter at 21.0%. While there were pockets of positive absorption in the northern submarkets, and Route 128 Northwest in particular, this was outweighed by nearly 600,000 square feet of negative absorption in the Route 495 West submarket. The Route 495 West submarket has been hit hard by a handful of large corporate consolidations, the most recent being Fidelity’s decision to vacate over 650,000 square feet at its Puritan Way, Marlborough campus.

Aggregate statistics for the offi ce and R&D market are provided below:

MarketSupply SF

(000s)Vacancy

Rate

Absorption SF (000s)

Q4 2011 YTD

Suburban Boston 128,529 21.0% (267) 30

Inner Suburbs 5,850 15.8% 13 (82)

Route 128 73,099 18.5% 331 416

Route 495 47,566 25.8% (765) (261)

Worcester 2,014 15.3% (1) (43)

SUPPLY AND DEMAND

• The suburban offi ce and R&D market totals 128.5 million square feet, with performance and product varying from one submarket to the next. The four Route 128 submarkets report a combined vacancy rate of 18.5%, compared to 25.8% in the three Route 495 submarkets.

• Although the median suburban requirement is 15,000 square feet, there are some sizeable tenants in the market with potential requirements over the next 12 to 24 months, including:

Tenant SF Industry Target Market

TJX Companies 1,000,000 Retail Routes 495 West/128 Mass Pike

Keurig 500,000 Consumer Products Route 128 North

NetApp 400,000 Computer Software and Services Route 128 Mass Pike

Kronos 350,000 Computer Software and Services Route 495 North

Athenahealth 250,000 Electronic Health Records

Inner Suburbs/Route 128 Mass Pike

Dunkin Brands 210,000 Retail Routes 128 South/128 Mass Pike

Converse 200,000 Retail Route 495 North

Arbella Insurance 180,000 Insurance Route 128 South

VELOCITY

Velocity (signed lease activity) totaled over 7 million square feet in 2011, with the majority of transactions less than 20,000 square feet in size. Some of the larger transactions executed during the year included:

Tenant Address SF

Motorola 900 Chelmsford Street, Lowell 194,000

The Shaw Group 150 Royall Street, Canton 190,000

NxStage Medical 439 South Union Street, Lawrence 140,000

E Ink 1000 Technology Park Drive, Billerica 139,000

Avaya 600 Technology Park Drive, Billerica 135,000

Vecco Solar 558 Clark Road, Tewksbury 90,000

ABSORPTION AND VACANCY

• The suburban vacancy rate has been at a virtual standstill for the past two years, hovering around 21%. The year 2011 was statistically unremarkable, with a meager 30,000 square feet of positive absorption.

• Despite the sluggish absorption in aggregate, the Route 128 Northwest submarket recorded over 350,000 square feet of positive absorption in 2011, with Burlington alone accounting for 270,000 square feet. Class A buildings in Burlington were able to outperform some of their suburban counterparts due to a strong amenity base and close proximity to major highways (Routes 128 and 3, I-93).

• Negative absorption of 460,000 square feet in the Route 495 West submarket is largely attributable to Fidelity vacating over 650,000 square feet at 300 and 400 Puritan Way, Marlborough. Although the submarket has been hit hard by a

Historical Vacancy and Absorption

Office and R&D

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2,000

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Suburban Overview

handful of large campus consolidations and the vacancy rate is 30%, the year ended on a positive note with fourth quarter absorption of 132,000 square feet.

OFFICE RENTAL RATES

• Weighted average Class A offi ce rents range from $19.50 per square foot in the Route 495 West submarket to $30-$32 in the 128 Mass Pike and Inner Suburban submarkets.

• Rents were generally stable during 2011 and will be held in check so long as the vacancy rate tops 20%.

• Select landlords that were successful in their leasing campaigns during 2011 are beginning to push rents in premier Class A buildings, but any across-the-board increases are unlikely in the near term.

TRENDS

• Small- to mid-sized users are the most active segment of the market headed into 2012.

• Larger tenants (over 100,000 square feet) will seek to do “more with less.” Effi ciency and cost control are critical.

• A marginal decrease in the vacancy rate is expected in 2012, with expansion primarily from small businesses and start-ups.

• Select Class A, amenity-rich buildings located along the stretch from Burlington to Needham and close to Route 128 will be able to realize rental growth in 2012.



INVESTMENT SALES

• Aggregate sale volume in 2011 totaled approximately $5.4 billion, or nearly twice the 2010 volume. The volume increased for all major property types, as illustrated below.

• Boston remains one of a select group of sought-after coastal cities considered safe bets due to its affl uent population, knowledge-based economy, institutional demand drivers and inherent constraints on new supply.

• Sale volume and pricing was dominated by fund managers, and in particular by core institutional investors. Given the current low-interest rate environment and relative to alternative asset classes, real estate performed well for this buyer sector in 2011. With many investors focused on downside protection versus upside potential during times of volatility, Boston is seen as a safe harbor.

• For much of the year, private buyers were frustrated by the lack of distress at the opportunistic end of the spectrum and aggressive pricing at the core end of the spectrum. Foreign investment was limited to a few transactions, the largest of which was German fund Jamestown’s Newbury Street, Boston portfolio acquisition.

• The macro national trends are clear that troubled loans need to be resolved or disposed. Locally, rising property values and an abundance of available equity for re-capitalization has mitigated the distress and thus the opportunities. However, many loans temporarily modifi ed through restructures and/or extension during 2008 to 2010 are nearing the end of their modifi cation period and may hit the market in 2012.

OFFICE

• Aggressive bidding on core downtown offi ce assets continued during the fourth quarter. Notable transactions included two Class A trophy assets—Exchange Place in the Financial District and One Exeter Plaza in the Back Bay—selling at greater than $500 per square foot and at cap rates at or below 5%.

$0.0

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$1.5

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2012 Pending2011201020092008

Annual Sales Volume by Type

Billions

Multifamily Industrial Retail Suburban Office CBD Office



Capital Markets

• Outside of Boston, fourth quarter transactions refl ect investor demand for well-located and well-leased properties with those in less favorable submarkets demanding increased yields. Among the fourth quarter trades were two sizable portfolio transactions in Cambridge, including MetLife’s sale of Cambridge Place, a three-building offi ce/lab complex, to BioMed Realty Trust for $120 million, or a 5.5% cap rate. The fourth quarter also included the sale of the Campus at Marlborough, a fully-leased four-building portfolio, at an 8% cap rate, and the REO sale of 4 Van De Graaff drive in Burlington to user Oracle Corporation.

Address/Property Name Buyer Seller Price Size (SF) $/SF

Boston

Exchange Place, 53 State Street UBS Brookfi eld Offi ce Properties $610 million 1,194,000 $511

One Exeter Plaza AEW Capital Management Ruben Companies $112 million 211,351 $530

Cambridge

Cambridge Place I-3, Cambridge (offi ce/lab) BioMed Realty Trust MetLife $120 million 286,878 $418

Campus at Marlborough (offi ce) Hines Global REIT Eaton Vance Investment Managers $103 million 557,035 $185

617 & 625 Concord Avenue; 20-26, 36 Moulton Street; 77 Fawcett Street, Cambridge (offi ce/fl ex) Goldman Sachs Cabot, Cabot, & Forbes $53.6 million 244,023 $219

4 Van De Graaff Drive, Burlington (offi ce) Oracle Corporation Capmark Bank $16.5 million 93,000 $177

20 Computer Drive, Haverhill (industrial) Paradigm Properties Suff olk Advisors, LLC $15.5 million 203,818 $76

RETAIL

• Boosted by a number of landmark transactions, fourth quarter retail sales were especially strong, comprising over two-thirds of 2011’s total retail sales activity. The most notable of the fourth quarter transactions was the $182.5 million purchase by Jamestown Properties, a German fund manager, of 21 properties on or near Newbury Street totaling 181,569 square feet. The portfolio was largely retail, but also included residential and offi ce uses.

• Retail sales volume will start 2012 strong with Macquarie’s sale of Shoppers World in Framingham to a joint venture between Blackstone and DDR for $133 million. Part of a 48-property portfolio in which DDR owned a percentage of each center prior to sale, this sale is just one example of the numerous national portfolio transactions that have become more common.

Address/Property Name Buyer Seller Price Size (SF) $/SF

Boston

Newbury Street Portfolio Jamestown Urban Meritage/Taurus Investment Holdings $182.5 million 302,918 $602

Faneuil Hall Marketplace Ashkenazy Acquisition Corp GGP, Inc. $140.0 million 201,656 $694

350 Washington Street Invesco Real Estate Capital Partners $128.0 million 149,977 $853

MULTIFAMILY

• The multifamily sector also fi nished the year strong. Throughout 2011 pricing for apartments was aggressive due to strong real estate fundamentals and abundant fi nancing opportunities. The largest transaction of the quarter was JPI’s sale of the 1,020-unit Jeff erson Hills apartments in Framingham to Greystar Real Estate Partners at a 5.7% cap rate. The Invesco sale of the Walden Park Apartments in Cambridge to Equity Residential for $64.9 million is notable for its 4.5% cap rate.

Address/Property Name Buyer Seller Price # of Units $/Unit

Jeff erson Hills Apartments, Framingham Greystar Real Estate Partners JPI $128.0 million 1,020 $125,490

Walden Park Apartments, Cambridge Equity Residential Invesco $64.9 million 232 $279,741

200 Oak Point Drive, Oak Point, Middleborough Hometown America Saxon Real Estate Partners $55.0 million 870 $63,218



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Annual Sales Volume by Type

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Source: Trepp, Colliers International

DEBT

• 2012 is positioned to be a year with increased lender volume because of refi nance needs and an uptick in acquisitions. As banks continue to be a great source of $5 to $25 million dollar loans, life companies are expected to increase their allocations to real estate, and CMBS to re-emerge, both driving up competition for loans in 2012.

• New England-based borrowers are very fortunate with the quality of our commercial banks and the fact that most have a favorable view of real estate. For stabilized assets with proven sponsorship, banks have been waiving recourse requirements and providing 65%-70% leverage with rates ranging from high threes up to fi ve percent.

• In light of national statistics with respect to growing delinquencies and uncertainty regarding ballooning loan maturities, Boston is performing substantially better than the rest of the country. The following graph illustrates the CMBS loans currently delinquent or in special servicing in the largest offi ce markets:

• The CMBS market was dealt a major setback in late July when Citigroup and Goldman Sachs were forced to cancel a $1.5 billion securitization. Only the strongest CMBS lenders that have the ability to utilize their balance sheet or that have built-in B-piece buyers will emerge from this downturn. The already reduced pool of lenders in the CMBS market are quoting spreads 325 to 350 basis points over the 10-year swap, which translates to all-in-rates between 5.0% and 5.5%. Even with higher rates than some other sources of permanent capital, CMBS shops are competitive when every last dollar counts or with assets in secondary or tertiary locations.

• Unlike CMBS, life company delinquencies have remained extremely low, less than 1% during the downturn. Because of their prudent underwriting, life companies have almost across the board increased their allocation for mortgages and increased exposure to the Northeast is a key goal for 2012.



Capital Markets

TRENDS

• REITs raised $51 billion in 2011, the highest annual raise in the last 10 years, and positioning REITS to be market makers in 2012.

• The pipeline of new property off erings is expected to expand into 2012, particularly for retail and industrial properties. Multifamily and CBD offi ce will continue to experience the lowest cap rates, given core investor demand and the likelihood for income growth over the next few years.

• For those loans that are maturing or underperforming, expect to see more debt restructuring and discounted payoff s in 2012 as lenders continue to clean up their balance sheets.

• Life companies will continue to deliver certainty and be a preferred choice of capital for core and well located assets in 2012.



Colliers International

160 Federal Street

Boston, MA, 02110

www.colliers.com

The information contained herein has been obtained from sources deemed reliable. While every reasonable eff ort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report. This publication is the copyrighted property of Colliers International and/or its licensor(s).

©2011 Colliers International. All rights reserved.

To be placed on our mailing list, please visit www.colliers.com/boston

MARKET SQUARE FEET (SF) SUPPLY

DIRECT SFAVAILABLE

SUBLEASE SFAVAILABLE VACANCY* Q4 2011

ABSORPTIONYTD

ABSORPTION

BOSTON 60,561,709 8,497,416 1,078,625 15.8% 108,158 608,079

Back Bay 11,981,716 603,151 139,041 6.2% 86,224 297,666

Financial District 33,597,405 5,909,323 599,487 19.4% 16,303 38,640

Charlestown 2,706,860 177,649 51,814 8.5% 42,343 76,736

Crosstown 1,122,326 71,170 0 6.3% 5,202 16,546

Fenway/Kenmore 1,826,057 138,173 111,000 13.6% 0 (45,761)

North Station 1,881,789 253,848 18,561 14.5% 18,096 72,898

Seaport 6,261,539 1,097,207 126,379 19.5% (54,211) 178,366

South Station 1,184,017 246,895 32,343 23.6% (5,799) (27,012)

CAMBRIDGE 19,813,110 2,275,183 284,877 12.9% 196,980 217,730

Alewife Station/Route 2 2,756,411 365,674 15,000 13.8% 48,366 279,248

East Cambridge 15,132,939 1,790,266 259,877 13.5% 149,000 (58,573)

Harvard Square/Mass Ave 1,923,760 119,243 10,000 6.7% (386) (2,945)

SUBURBS 128,528,885 23,963,004 3,086,314 21.0% 266,637 29,595

Inner Suburbs 5,850,321 873,531 49,495 15.8% 12,704 (82,739)

Route 128 North 7,974,140 1,244,658 261,789 18.9% 3,797 157,816

Route 128 Northwest 21,798,448 3,178,989 642,045 17.5% (255,363) 354,377

Route 128 Mass Pike 28,318,820 4,587,813 516,920 18.0% 210,221 (56,173)

Route 128 South 15,007,596 2,850,427 271,932 20.8% 144,872 (39,711)

Route 495 North 25,138,162 5,348,760 559,628 23.5% 11,600 183,862

Route 495 West 17,916,828 4,685,043 665,489 29.9% 132,247 (460,434)

Route 495 South 4,510,903 886,309 119,016 22.3% 7,684 15,460

Worcester 2,013,667 307,474 0 15.3% (1,125) (42,863)

TOTAL 208,903,704 34,735,603 4,449,816 18.8% 571,775 855,404

*Including sublease space

CONTACT:Mary Sullivan KellySenior Vice President & Chief Research Offi cerDIR +1 617 330 8059

FAX +1 617 330 8127

[email protected]

Q4 2011 STATISTICS | OFFICE/R&D

Market Snapshot

GREATER BOSTON MARKET VIEWPOINT · percentage point in 2011—from 16.8% to 15.8%—as over 600,000...

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