For Every Love Letter Written, There's Another One Burned--A Little Balance Please

Banker & Tradesman’s lead article today was “Boston Tenants Vacate 1 M Square Feet in 2010.” A good grabber. And it’s even true. Gritty reading as Jim Cronin covered all of the properties that saw tenants pack up and go. He even got some respectable industry quotes. The problem is that his article was only half-a-story, as they say. What he forgot to cover or just plain overlooked is that more than 1 M Square Feet was occupied by fresh tenancies in 2010. Let’s get into the detail.

Banker & Tradesman (“B&T”) failed to balance off the vacancies to space that came to the market in 2010 with companies that did indeed, contrary to some of the article’s quoted sources, backfill the vacancies. Every good real estate researcher knows that backfilling takes place across markets, not within individual buildings. If B&T does not analyze the data this way, then B&T would be showing massive negative absorption in Boston of over 1 million in 2010. Every brokerage house and I have already noted positive absorption for the year. I will use B&T’s list first and then cover the properties they ignored.

1. International Place—Yes, when Ropes moved, nobody backfilled the space. But B&T failed to mention that Ropes’ move to 800 Boylston completely backfilled the vacancy left by the Gillette Company after its purchase by Procter & Gamble to the tune of 400,000 square feet.

2. One Federal—B&T is right on with this property. Between One Federal and 125 High, Tishman is sitting on the largest amount of space of any landlord in the city.

3. One Congress—I would not consider a converted garage to even be in inventory and thus not truly vacant. Under Tom O’Brien, the property is being marketed as future office space, and Tom is seeing a lot of interest.

4. 225 Franklin—This is B&T’s biggest mistake. Bank of America leased 226,000, followed shortly by Ameriprise Financial for 130,000 square feet. Along with 100 High, covered below, 225 Franklin was the success story of 2010. B&T’s numbers are completely wrong.

5. 99 High Street—How can B&T mention a vacancy increase without talking about the building’s largest tenant, KPMG, taking over 100,000 square feet to anchor Two Financial Center?

6. 53 State—Same question. The entirety of the vacancy at 53 State consists of Choate’s backfilling massive relocations out of Two International Place. The same will be true at 75 State when Wellington vacates 300,000 square feet there and at a handful of properties to anchor 500 Atlantic in a 400,000 square foot lease.

B&T missed the remarkable leasing efforts at 100 High Street—net 140,000 square feet slowly chipping away at what Bingham left behind; at 200 Clarendon led by the Bain Capital lease; and by way of Liberty Mutual’s expansion into 500 Boylston and its announcement of a new tower which will represent net growth. And many more pure growth stories.

B&T needs to make a choice—accurate net absorption figures or scary stories. You can’t have it both ways, no matter how much of a “grabber” it is.