A recent instance of this trend is evident in the move of Pret A Manger made to snag the 2,000 sq. ft. space in the Financial District, formerly occupied by Dunkin’ Donuts.
The BBJ reported on the new occupants of 176 Federal St. in the Financial District, noting it may be just the first of many similar moves for the London-based eatery, “Pret A Manger has been looking to expand in Greater Boston with plans to open a dozen cafes over the next five years. James O’Mara, an attorney representing the eatery, said Pret A Manger will be opening a shop as early as this spring at 101 Arch St. in Boston’s Downtown Crossing at the former Men’s Wearhouse.”
More co-working office space is now available in Boston for upstart companies to choose from. Not too sure if you can make a long term lease commitment? Idea Space at 867 Boylston Street is the newest to jump in to this evolving market. Their niche: boutique co-working space.
Idea Space in Boston
According to coverage on the BBJ, “the 4,500-square-foot space is home to about 25 small companies.” Idea Space owner, Lauren Mearn, notes the impetus for opening the co-working space in Back Bay in the BBJ article:
“people want ‘a cool place to work that wasn’t a coffee shop and that wasn’t home'”
The full article on the Boston Business Journal is available, here.
WOW! This market is on fire ! I haven’t seen the market this competitive for tenant’s trying to lease office space in years !! The last several commercial office lease deals I have done in Boston have ended up with multiple tenants competing for the same space. My advice to tenants out there is to keep your options open, choose more than one possible option when looking for office space because you never know when you may be out bid. If you find a space you love, just grab it quickly, time is of the essence in today’s market.
If you’d like any assistance, have questions, or would like to schedule a showing, please contact Bonny L. Doorakian at firstname.lastname@example.org, or by phone at 617.850.9655 (tel), 617.763.2919 (cell).
I ask this question as it seems to have become quite the commodity in today’s office market. I show space that is “cool creative office space” all the time. I see new tech startups trying to be cool or shabby chic in order to recruit the younger tech office tenant. There are only so many buildings in Boston that already have this look and feel, so I began to really research into what makes a space cool, creative and collaborative and I came across an invaluable article from INC.com.
What I found is that it’s beyond just bricks and mortar and other physical attributes of the space or building. Bottom line, companies do not want their dad’s office space, they want to create an atmosphere, an experience for their employees through design and company culture.
What does creative space look like to up-and-coming startups? In short, it’s a collaborative environment with as much natural light as possible. Young companies need to provide an attractive work atmosphere for new hires, while offering something refreshing to their existing workforce.
For example, Tim Coburn, CEO of Boston startup Jebbit, in an article for Banker & Tradesman, wrote:
“Fostering collaboration: We really wanted something open and the tower of the Landmark building, where we are now located, offered 360 views of the city, big windows, bright light and open space – it was so different from everything else we looked at. It didn’t feel like a “classic office” and for us, that fit. Today we have orange bean bag chairs in the middle, for group meeting or conversation, and it’s wide open with a lot of desks around windows. White boards everywhere help us brainstorm on the spot.”
Tim Coburn’s article is published on Banker & Tradesman, here.
Office development within Boston is at its strongest in years, some might even say ever. Most of what we are seeing is large residential projects, but Boylston Street continues to evolve with 888 Boylston St. breaking ground this spring, which will add to the 3.2 million square feet of office space that’s part of the Prudential complex.
The BBJ, reporting on a panel discussion hosted by NAIOP, printed the following:
The group agreed that a perfect storm led by the Big Dig’s completion, a growing population, a flood of Baby Boomers who want to return to the city, lower unemployment and a rush of foreign capital is lending to the city’s multibillion-dollar development pipeline.
“We are seeing an unprecedented amount of development going on all around in the city … and many of these projects are very large, complicated developments that we haven’t seen in 20, 25 years,” said Raiz Cassum, the event’s moderator and a senior managing director at HFF. “
“Collaboration” seems to be the most common term in the lexicon of today’s emerging companies. A company dedicated to dynamic, collaborative office space is helping to ensure the trend has an increasing presence in Boston.
From the Daily Free Press:
“WeWork is a collaborative office space, with more than 2,000 members expected to call the Boston offices home by summer. The office space is shared primarily by early-stage startups that would otherwise not have access to many of the amenities available within the space.”
As our working population grows, so does our parking demand. In Back Bay, a month parking pass at the Prudential has increased from $445 to $460, while Copley has risen from $320 to $360. SpotHero is trying to help those that are looking for spots.
“SpotHero, which partners with large parking lots and parking and valet garages around the city to offer users thousands of parking spots to choose from, plans to also expand to other neighborhoods in the greater Boston area this year…’Boston is a key market for us that we’re going to put a lot of time into, and that starts with getting inventory in the downtown area and expanding it from there,’ SpotHero co-founder and COO Jeremy Smith remarked to the Boston Business Journal.
Is your commute better or worse than it was 2 years ago? According to http://www.inrix.com/ Boston leads the charge with the greatest increase. That combined with the increase purchase order of tractor trailers says that this is a trend that will continue well into the future.
An article on the BBJ, citing traffic data from INRIX, quantifies just how bad Boston’s traffic was in 2013:
“[The Boston metro area’s] congestion index rose 22 percent, the most of any region in the top 10 and the 8th biggest increase of all 100 metro areas. Boston drivers now waste 38 hours a year in traffic, on average. INRIX counts any time spent driving at less than half a roadway’s typical speed as wasted time. Of course, you’ll end up wasting a lot more if you drive on the Southeast Expressway, Boston’s most congested highway based on INRIX’s calculations: A 10-minute drive can turn into 35-minute drive at morning rush hour. (That said, there are plenty of drivers who would tell you they’d be relieved to get through the Expressway in 35 minutes at rush hour.)”
Boston’s Financial District attracted positive demand in 2013 as Class B properties and Class A commodity space continue to benefit from the lack of prime availability. Tenants flocked to the Financial District from supply constrained markets like East Cambridge, the Back Bay and Seaport. This demand saw year over year rents increase in excess of 20% in the Class B market. Many Landlords are capturing this demand by proactively renovating and upgrading suites to open concept, spec suites that offer today’s tenants ready-to-go spaces with more flexible lease commitments. The red line continues to be the main driver and 2014 is poised to see a true renaissance of Boston Downtown Crossing neighborhood. Boston’s transportation hub is spurred by the new Millennium Tower redevelopment of the Filene’s Basement site. This area will continue its transformation as a hub for new and emerging companies. Expect rising rental rates and continued demand to drive some Class B building owners to complete capital improvement projects and upgrade second generation spaces to compete for tenants.
Vacancy & Rental Rates: Overall 2013 saw tenants absorb over 1,000,000 SF square feet of commercial office real estate in Boston’s Central Business District. The Class B office market in particular saw 322,258 SF of absorption in 2013 bringing the vacancy rate to 8.0 percent. This trend of positive absorption has continued over the last 8 quarters resulting in the increase of asking lease rates for class B product to an average asking rate of $31.08 per rentable square foot. Supply constrained markets like the Back Bay and Seaport continue to impact market fundamentals by increasing demand in other areas of the city like the Financial District resulting in further recovery in rental rates reviling pre-recession pricing of early 2008.
Demand Driver: Class B real estate activity provided a look into the dynamics of the Boston economy and leasing activity suggests that Boston is not slowing down and expected to continue with compound annual rent increases excess of 10 percent through 2015. As the value play alternative, the Class B Financial District market continued capitalizing on rising Class A rents combined with limited supply in the Seaport, Back Bay and East Cambridge. This is most evident within the Financial District where tenants seeking value have poured into buildings with great T access like Downtown Crossing.
Outlook: Healthy fundamentals persist in submarkets like the Back Bay, Cambridge and the Seaport District and demand appears to be spilling into neighboring submarkets. Continued growth and positive indicators seen regionally mixed with the most optimistic confirmation of stock market and national employment data seen since 2007 suggests further gains in employment and real estate occupancy in coming quarters. With some of the regions most desired locations becoming market wide choice-constricted and no speculative construction underway market wide, many expanding tenants will increasingly consider peripheral locations and other creative solutions with rent levels adjusting to changing demand trends.