The largest concentration of office space North of NYC is making some changes: Boston’s Financial District is adding new construction with automated parking facilities, starting with One Post Office Square.
According to Banker and Tradesman, “the 41-story One Post Office Square tower..owner Morgan Stanley seeks to demolish the existing 6-story parking garage and build an 18-story addition including 265,000 square feet of office space atop a new automated parking system…Part of a comprehensive repositioning of the 832,000-square-foot tower built in 1980…would include a new glass curtain wall to replace the concrete facade, floor-to-ceiling windows and a 2-story rooftop lighting element dubbed “The Lantern” that would become a new skyline beacon.
Additional details on the tower and the Financial District’s planned modifications are available on B&T’s website.
Boston office design still includes the basics, but now a genuine focus is placed on employee retention. Flexible, creative and communal space are the buzzwords that are exchanged when office tenants share their ideas of what their new space should embody.
Biznow takes a deep dive into a recent report released by architecture firm Ted Moudis Associates, assessing the evolution of office design over the last year, notes the following in its conclusion:
Instead of trying to find one seamless solution for everyone, organizations are working to develop new spaces that will cater to different working styles in order to encourage a balance between effective and efficient workspaces.
“People come to the office to connect with colleagues and so that interaction with the education aspect and learning from their peers and the senior leadership in the office [is important],” [Ted Moudis Associates Director of Workplace Strategy Jamie] Feuerborn said. “I think they want choice. If I want to do heads down focus work I have a place to go, if I want to connect with colleagues I can choose to sit in a different environment to do that.”
For more information, jump over to Biznow’s complete coverage.
Credit: Boston Globe
If we build it they will come. This is not the mind set of all owners; those willing to make that bet, however, have been rewarded with new tenants. Only four buildings in Boston can deliver over 150K SF today, while eight proposed buildings can deliver sometime in the future.
According to the Boston Globe, “speculative building has [traditionally] been a rare and risky move in Boston’s relatively conservative development sector. Office builders typically don’t move dirt until they have leased at least half the space they’re planning. It’s a cautious approach that has protected Boston’s office market against the types of booms and busts that some other cities have experienced, but it’s also one reason the current building surge has mostly centered on housing. Now, with growing tech-oriented companies such as Wayfair and Amazon searching for large blocks of space — and finding few — more developers are mulling a roll of the dice…Rather than sign a lease and then embark on a three-year construction project…developers are considering jumping the line.
You can read the Boston Globe’s article, here.
Gone are the days when tenants would start looking for Boston office space one-to-two years in advance. Prospective tenants now find themselves shopping for immediate occupancy, and are only interested in spec suites that have been prebuilt by the landlord to meet today’s connectivity demands.
Tech has dominated the ongoing positive cycle in Boston’s office market, and the industry’s reputation as a disruptor has extended into how landlords appeal to potential tenants. While law firms and financial firms are known for making space decisions far in advance, the tech community has compressed the time from site tour to move-in…Their growth is more explosive than a bank or insurance company; thus, they wait until the last minute.
As life science firms turned Cambridge into a lab-dominant market, the historically tech-heavy Kendall Square passed its tech reputation across the river into areas like Boston’s Fort Point and Seaport neighborhoods.
Credit: Boston Real Estate Times
What will the Dunkin’-of-the-future near your office look like?
According to the Boston Real Estate Times, you can get a glimpse at “588 Washington Street in Quincy, Massachusetts [which] offers the first look at the brand’s U.S. store of the future experience, with a modern atmosphere and new and innovative technologies and design elements — including the first drive-thru exclusively for mobile ordering.”
New Dunkin’ locations will including the following elements:
- Modern, Energy-efficient Design
- Mobile Drive-Thru
- Cold beverage taps
- Digital kiosks
- Healthy menu additions (ie. fresh fruit, yogurt parfaits, nut butter packs, etc.)
You can read more on the new Dunkin’ experience at the Boston Real Estate Times.
Credit: Commercial Cafe
Boston has strong fundamentals and looks for increased rent growth in 2018.
Here’s a 2017 Assessment from Commercial Cafe:
Boston averaged between 11% and 12% office vacancy in 2017. Desirable tech submarkets are priced at a premium here, while emerging submarkets often offer discounts–the overall average asking rent in tech submarkets is priced at a 16% premium in East Cambridge (where inventory has decreased).
The Boston market also retained positive absorption, as vacancy dropped 0.4 percentage points to 12.0 percent last year. Large tenant move-ins have driven the 2017 Boston CBD market, with major shifts including Natixis Global Asset Management’s move into its new 150,000-square-foot headquarters at 888 Boylston St. in the Back Bay.
What are some of the most notable office landlords, like Boston Properties, doing to address the growth of the co-working segment that is being championed by WeWork?
“Our point of view is we’re pretty maniacally focused on our customer, and our sweet spot has been this long and strong customer: long-term leases, strong credit,” [Boston Properties Executive Vice President Bryan Koop] said. “As we continue to focus on that, there will be changes in how we work with them.”
Boston’s surging real estate cycle is driven by tech, both by traditional technology tenants like Rapid7 as well as companies with an increased digital presence like General Electric. With every company increasingly thinking of themselves as a tech company, plug-and-play connectivity and less lag time between lease signing and move-in are rising expectations, forcing landlords to take a more active role in their tenant experience.