Sunday, May 23, 2010

Millions of Square Feet of Vacant Office Space in Boston

While construction of new office space in Boston is stalled due to a lack of tenants, a number of Boston towers are in trouble with vacancy rates as high as 74 percent, the Boston Herald reports.

“Boston has the equivalent of seven vacant 1-million-square-foot towers,” says David Richardson, executive vice president at McCall & Almy, a brokerage that only represents tenants. “Without tenants, landlords can’t pay the mortgage and that can lead to a restructured loan or foreclosure.”...

Among the towers with the biggest amount of vacant space are 53 and 75 State St., which are owned by New York-based Brookfield Properties Corp. The two buildings that total more than 1.8 million square feet have 904,511 square feet of space to fill, the Herald reports.

The Chiofaro Co... faces 23 empty floors at 1 International Place.

Rounding out the top five towers with the most space to rent are 1 Federal St. in the Financial District where 440,699 square feet is available and 500 Boylston St., which has 253,219 square feet of space in Boston's  Back Bay.

A big problem for Boston is that it is a capital goods service intensive city, that is, they have top mutual fund managers, including Fidelity, and other type institutional money managers. These are the industries that get hurt the most during a downturn in the business cycle.

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