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Accelerating success.


Boston Overview
The vacancy rate in the Boston office market dropped one percentage point in 2011from 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:
Total Boston* Back Bay Financial District Charlestown Crosstown Fenway/Kenmore North Station Seaport South Station
* includes sublease space

VELOCITY Velocity (signed lease activity) totaled over 4 million square feet in 2011, and was largely dominated by Vertex Pharmaceuticals second quarter lease for 1.1 million square feet of build-to-suit office 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 Bostons 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:
Vertex Pharmaceuticals Brightcove CBIZ Tofias Jones Day Allen & Gerritsen Finnegan Henderson, Farabow, Garret & Dunner W2 Racepoint

Supply SF (000s)
60,562 11,982 33,597 2,707 1,122 1,826 1,882 6,262 1,184

Vacancy Rate
15.8% 6.2% 19.4% 8.5% 6.3% 13.6% 14.5% 19.5% 23.6%

2011 Absorption SF (000s)

608 298 39 77 16 (46) 73 178 (27)

Prior Location New Location

Cambridge Cambridge Cambridge New to Market Watertown Cambridge Waltham Cambridge New to Market Cambridge Seaport Financial District Back Bay Financial District Seaport Seaport Financial District Seaport Back Bay Financial District

1,100,000 80,000 40,000 35,000 33,200 33,000 32,000 18,400 18,000 18,000

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 office space. Although the median requirement is 12,000 square feet, some of the larger requirements include:
State Street Bank Blue Cross Blue Shield of Massachusetts Brown Brothers Harriman Mintz Levin Lexington Insurance Cambridge Associates Iron Mountain

Heartland Robotics Latham & Watkins Elysium Digital

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 influx 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.

1,000,000 350,000 300,000 225,000 175,000 150,000 100,000

Financial Services Health Care/Medical Financial Services Legal Insurance Investment Advisory Information Management Services

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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 office supply in 2013, representing Liberty Mutuals new headquarters in the Back Bay and the two Vertex buildings in the Seaport District.
Projected Vacancy & Absorption
2,000 1,500 1,000
SF (Thousands)

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

20% 15% 10% 5% 0%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

500 0 -500 -1,000 -1,500

Total Boston Absorption Total Boston Vacancy Rate Back Bay Vacancy Rate Financial District Vacancy Rate


RENTAL RATES Average asking rents have been relatively flat 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
Class A high rise Class A mid rise Class A low rise Class B

Rental Range/SF
$55 - $75 $45 - $55 $40 - $45 $25 - $35

CONTACT: Mary Sullivan Kelly |

Colliers International |

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Cambridge Overview
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 significant 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 significant new building in East Cambridge, with eight buildings totaling just under 2 million square feet under constructionthe most new lab and office 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 buildto-suits for life sciences organizations. The vacancy rate in Cambridges 19.8-million-square-foot office 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 reflected 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:
Supply SF (000s)
19,813 10,256 8,774

the most significant 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:
Biogen Idec Biogen Idec Pegasystems Google Google
(bts) build-to-suit

241 Binney Street (bts) 17 Cambridge Center (bts) One Rogers Street (r) (e) 4 Cambridge Center (e) 3 Cambridge Center (e)
(r) relocation (e) expansion

300,000 190,000 160,000 80,000 60,000

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, costconscious technology companies to consider office options outside of East Cambridge, with the up and coming Innovation District in Bostons 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 Bostons Seaport District.
Brightcove Zip Car SCVNGR ChoiceStream famaPR

Total Cambridge* Office Lab
* includes R&D space

Vacancy Rate
12.9% 10.0% 17.0%

Absorption SF (000s) Q4 2011

197 83 110

80,000 45,000 30,000 18,000 10,000 Active

Atlantic Wharf

218 244 (42)

Signed LOI Active Liberty Wharf

OFFICE MARKET The vacancy rate in the 10.3-million-square-foot office 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 landlords 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, RREEFs 101 Main Street. Velocity (signed lease activity) totaled over 1.3 million square feet during 2011. Large pharmaceutical and biotech companies were
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Rents, which had been fairly steady for the first 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 Class A East Cambridge Class B East Cambridge Class A Alewife Q4 2009 $30-$45 $28-$33 $24-$28 Q4 2010 $35-$48 $30-$35 $24-$28 Q4 2011 $40 - $57 $35 - $40 $26 - $35


LAB MARKET The 8.8-million-square-foot lab market finished 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 first 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 significant leases are not renewed. The chart below depicts the breakdown of available lab space by type and quality.
Space Type
Class A Biotech-Ready Shell Class A Existing Lab Class B Existing Lab Obsolete Lab Totals

Broad Institute Pfizer Vertex Pharmaceuticals Quest Diagnostics Ariad Pfizer
(bts) build-to-suit (r) relocation

75 Ames Street 610 Main Street 88 Sidney Street 415 Massachusetts Avenue 26 Landsdowne 700 Main Street

250,000 (bts) 184,000 (bts) 145,300 (r) 114,000 (r) 100,400 (r) 100,000

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 find 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 different landlords. The spread between asking rents in various segments of the market is depicted below:
Direct Asking Rents PSF, NNN
Space Type - Location Class A Existing - East Cambridge Class A Shell - East Cambridge Class B Existing/Shell - East Cambridge Class B Existing Alewife Q4 2011 $50 - $65 $58 - $70 $35 - $48 $28 - $35

SF Available
754,000 389,000 205,000 152,000 1,500,000

% of Available Space
50% 26% 14% 10% 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 significant build-to-suit lab leases were signed in 2011. The largest transaction was the Broad Institutes ground lease for a 250,000-square-foot build-to-suit research facility located physically adjacent and connected to the Broads headquarters. But perhaps the most notable transaction was Pfizers build-tosuit lease for 184,000 square feet with MIT at 610 Main Street on the Osborne Triangle. Pfizer plans to move significant 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 office 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:
CONTACT: Mary Sullivan Kelly |

TRENDS The time is now for a speculative office 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.
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Suburban Overview
The suburban Boston office and R&D market was statistically flat 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 Fidelitys decision to vacate over 650,000 square feet at its Puritan Way, Marlborough campus. Aggregate statistics for the office and R&D market are provided below:
Supply SF (000s)
128,529 5,850 73,099 47,566 2,014

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:
Motorola The Shaw Group NxStage Medical E Ink Avaya Vecco Solar

900 Chelmsford Street, Lowell 150 Royall Street, Canton 439 South Union Street, Lawrence 1000 Technology Park Drive, Billerica 600 Technology Park Drive, Billerica 558 Clark Road, Tewksbury

194,000 190,000 140,000 139,000 135,000 90,000

Suburban Boston Inner Suburbs Route 128 Route 495 Worcester

Vacancy Rate
21.0% 15.8% 18.5% 25.8% 15.3%

Absorption SF (000s) Q4 2011

(267) 13 331 (765) (1)

30 (82) 416 (261) (43)

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.
Historical Vacancy and Absorption Office and R&D
5,000 4,000 3,000
SF (Thousands)

SUPPLY AND DEMAND The suburban office 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:
TJX Companies Keurig NetApp Kronos Athenahealth Dunkin Brands Converse Arbella Insurance

25% 20% 15% 10% 5%

2004 2005 2006 2007 2008 2009 2010 2011

2,000 1,000 0 -1,000


-2,000 -3,000
Absorption Total Vacancy

-4,000 -5,000

1,000,000 500,000 400,000 350,000 250,000 210,000 200,000 180,000

Retail Consumer Products Computer Software and Services Computer Software and Services Electronic Health Records Retail Retail Insurance

Target Market
Routes 495 West/ 128 Mass Pike Route 128 North Route 128 Mass Pike Route 495 North Inner Suburbs/ Route 128 Mass Pike Routes 128 South/ 128 Mass Pike Route 495 North Route 128 South

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

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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 office 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. Efficiency 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.

CONTACT: Mary Sullivan Kelly |

Colliers International |

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Capital Markets
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.

Annual Sales Volume by Type

$2.5 $2.0 $1.5 $1.0 $0.5 $0.0





Suburban Office CBD Office

2012 Pending

Boston remains one of a select group of sought-after coastal cities considered safe bets due to its affluent population, knowledgebased 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 lowinterest 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 Jamestowns 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 modified through restructures and/or extension during 2008 to 2010 are nearing the end of their modification period and may hit the market in 2012. OFFICE Aggressive bidding on core downtown office assets continued during the fourth quarter. Notable transactions included two Class A trophy assetsExchange Place in the Financial District and One Exeter Plaza in the Back Bayselling at greater than $500 per square foot and at cap rates at or below 5%.

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Outside of Boston, fourth quarter transactions reflect 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 MetLifes sale of Cambridge Place, a three-building office/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 Boston
Exchange Place, 53 State Street One Exeter Plaza UBS AEW Capital Management Brookfield Office Properties Ruben Companies $610 million $112 million 1,194,000 211,351 $511 $530




Size (SF)


Cambridge Place I-3, Cambridge (office/lab) Campus at Marlborough (office) 617 & 625 Concord Avenue; 20-26, 36 Moulton Street; 77 Fawcett Street, Cambridge (office/flex) 4 Van De Graaff Drive, Burlington (office) 20 Computer Drive, Haverhill (industrial) BioMed Realty Trust Hines Global REIT Goldman Sachs Oracle Corporation Paradigm Properties MetLife Eaton Vance Investment Managers Cabot, Cabot, & Forbes Capmark Bank Suffolk Advisors, LLC $120 million $103 million $53.6 million $16.5 million $15.5 million 286,878 557,035 244,023 93,000 203,818 $418 $185 $219 $177 $76

RETAIL Boosted by a number of landmark transactions, fourth quarter retail sales were especially strong, comprising over two-thirds of 2011s 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 office uses. Retail sales volume will start 2012 strong with Macquaries 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 Boston
Newbury Street Portfolio Faneuil Hall Marketplace 350 Washington Street Jamestown Ashkenazy Acquisition Corp Invesco Urban Meritage/Taurus Investment Holdings GGP, Inc. Real Estate Capital Partners $182.5 million $140.0 million $128.0 million 302,918 201,656 149,977 $602 $694 $853




Size (SF)


MULTIFAMILY The multifamily sector also finished the year strong. Throughout 2011 pricing for apartments was aggressive due to strong real estate fundamentals and abundant financing opportunities. The largest transaction of the quarter was JPIs sale of the 1,020-unit Jefferson 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
Jefferson Hills Apartments, Framingham Walden Park Apartments, Cambridge 200 Oak Point Drive, Oak Point, Middleborough

Greystar Real Estate Partners Equity Residential Hometown America

JPI Invesco Saxon Real Estate Partners

$128.0 million $64.9 million $55.0 million

# of Units
1,020 232 870

$125,490 $279,741 $63,218

CONTACT: Mary Sullivan Kelly |

Colliers International |

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Capital Markets
DEBT 2012 is positioned to be a year with increased lender volume because of refinance 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 five 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 office markets:
Annual Sales Volume by Type
40 35 30 25 20 15 10 5 0
% 60+ Days Delinquent % Performing Specially Serviced







Yo r













At la

Bo s








Fr an











Source: Trepp, Colliers International

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.

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ve rs id


Wa s








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 offerings is expected to expand into 2012, particularly for retail and industrial properties. Multifamily and CBD office 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 payoffs 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.

CONTACT: Mary Sullivan Kelly |

Colliers International |

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Market Snapshot
SQUARE FEET (SF) SUPPLY 60,561,709 11,981,716 33,597,405 2,706,860 1,122,326 1,826,057 1,881,789 6,261,539 1,184,017 19,813,110 2,756,411 15,132,939 1,923,760 128,528,885 5,850,321 7,974,140 21,798,448 28,318,820 15,007,596 25,138,162 17,916,828 4,510,903 2,013,667 208,903,704 DIRECT SF AVAILABLE 8,497,416 603,151 5,909,323 177,649 71,170 138,173 253,848 1,097,207 246,895 2,275,183 365,674 1,790,266 119,243 23,963,004 873,531 1,244,658 3,178,989 4,587,813 2,850,427 5,348,760 4,685,043 886,309 307,474 34,735,603 SUBLEASE SF AVAILABLE 1,078,625 139,041 599,487 51,814 0 111,000 18,561 126,379 32,343 284,877 15,000 259,877 10,000 3,086,314 49,495 261,789 642,045 516,920 271,932 559,628 665,489 119,016 0 4,449,816 Q4 2011 ABSORPTION 108,158 86,224 16,303 42,343 5,202 0 18,096 (54,211) (5,799) 196,980 48,366 149,000 (386) 266,637 12,704 3,797 (255,363) 210,221 144,872 11,600 132,247 7,684 (1,125) 571,775 YTD ABSORPTION 608,079 297,666 38,640 76,736 16,546 (45,761) 72,898 178,366 (27,012) 217,730 279,248 (58,573) (2,945) 29,595 (82,739) 157,816 354,377 (56,173) (39,711) 183,862 (460,434) 15,460 (42,863) 855,404

MARKET BOSTON Back Bay Financial District Charlestown Crosstown Fenway/Kenmore North Station Seaport South Station CAMBRIDGE Alewife Station/Route 2 East Cambridge Harvard Square/Mass Ave SUBURBS Inner Suburbs Route 128 North Route 128 Northwest Route 128 Mass Pike Route 128 South Route 495 North Route 495 West Route 495 South Worcester TOTAL
*Including sublease space

VACANCY* 15.8% 6.2% 19.4% 8.5% 6.3% 13.6% 14.5% 19.5% 23.6% 12.9% 13.8% 13.5% 6.7% 21.0% 15.8% 18.9% 17.5% 18.0% 20.8% 23.5% 29.9% 22.3% 15.3% 18.8%

Mary Sullivan Kelly Senior Vice President & Chief Research Officer DIR +1 617 330 8059 FAX +1 617 330 8127

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The information contained herein has been obtained from sources deemed reliable. While every reasonable effort 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.

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