0 Boston Office Rents Hit Decade High

Posted on January 14, 2016 by Wil Catlin

Credit: Boston Business Journal

The Commonwealth of Massachusetts holds a few distinctions aside from high office rents and expensive homes; Massachusetts is the highest educated state, and as such, holds the potential to attract top talent.

According to the BBJ, “rents for large office space in Greater Boston hit their highest levels in at least a decade in the fourth quarter of 2015, with the vacancy rate dropping to its lowest level since 2007…The total vacancy rate fell to 13.8 percent from 14.3 percent the previous quarter.”

You can read the full article, here.

0 Boston Office Market Trends: 2010-2015

Posted on December 17, 2015 by Wil Catlin

If your company signed an office lease during the Great Recession chances are your rents are looking pretty, pretty, pretty good.

Office space in Boston is growing increasingly more expensive. So much so current asking rents are at some of the highest they have ever been. The top floors of the Prudential building are asking $90 per rentable square foot…$90!

Boston Office Market Trends

The urban leasing team at Boston Realty Advisors wanted to know how much has changed in the last five years across all of Greater Boston’s major neighborhoods: East Cambridge, Seaport, Financial District, Back Bay, North Station. They included image break downs of each market on asking rental rates and vacancy rates for the top tier buildings (Class A) and the middle market buildings (Class B). The facts are astounding!

If your company’s lease is expiring in the next 12-24 months chances are the second fixed expense on your balance sheet next to payroll will be increasing if you wish to renew. Now is the time to engage your real estate team on how the current market dynamics will impact the company’s short and long terms plans for office space, the company’s bottom line, and how your company uses its current space. Knowing the options, risks, and opportunities in the current real estate climate is the best hedge against a rising market. Its starts with being proactive. Time can be your best leverage but quickly your worst enemy when it is running out.

Robert LeClair is Managing Director and Partner at Boston Realty Advisors having handled hundreds of lease transactions for clients in Greater Boston for over the last 10yrs.

Click here to download the full PDF: Boston Office Market Trends 2010-2015

0 Ron Druker Explains the Business of Condos

Posted on November 22, 2015 by Wil Catlin

Rendering of Millennium Tower in Downtown Crossing

Ron Druker of The Druker Company wonders, is it luck or skill with successful real estate projects?

From Bisnow:

Condos are a tricky business, especially compared to the reliable apartment…there’s a limited window for selling the units, Ron tells us. The developer who misses it can have trouble. Even when the project goes according to plan, Ron says, the risk is high and the reward may not be great. Sales can be strong, but the revenue is booked as ordinary income, which means that taxes can take a big bite. He says he was lucky twice: with The Heritage on the Garden in Back Bay and Atelier 505 in the South End. “I’m not sure I would be so again and choose not to tempt fate.” He’s also not about to build a big office/mixed-use project on spec.

You can read the full article on Bisnow’s website, here.

0 Check out Analytics Co InsightSquared’s new Boston HQ

Posted on November 20, 2015 by Wil Catlin

Credit: Boston Business Journal

Have a peak at what groups are doing with their new office space.

The BBJ posted a photo gallery of InsightSquared’s new Boston HQ, and notes the following:

The new headquarters, which InsightSquared cemented with an office-warming party last week, is a far cry from where they started in 2010. Back then, they were working out of a tiny space at Bessemer Venture Partners.

“It feels great to be here,” said CEO Fred Shilmover at the company’s office-warming party last week. “It feels like our first grownup office.”

InsightSquared is backed by $27 million in venture funding and employs 170, up from less than half that amount in 2014.

0 ‘Jewel Box’ Building at 15 Broad Street goes up for Sale

Posted on October 28, 2015 by Wil Catlin

15 Broad Street in Boston Financial District

Credit: Pinterest

Trades continue to take place in the Class B office sector with 15 Broad Street coming to market.

From The Real Reporter:

“the 73,500-sf “jewel box” building that is 100 percent occupied and has a cachet one observer terms “exceptional,” so much so that market estimates are putting the anticipated price range for an exchange around $475 per sf, which if accurate would be in the range of $35 million…As to pricing prospects, the concept of a deal around $475 per sf is bolstered by a similarly sized trade of another nearby asset in May when JLL delivered its client $479 per sf on the sale of One Milk St. to Midwood Investment and the $438 per sf Capital Properties paid to ELV Associates via Cushman & Wakefield a month before that for 66 Long Wharf, a 77,600-sf waterfront building blocks from Broad Street that carried a capitalization rate of 5.0 percent. “I could see that,” one downtown specialist says when asked if 15 Broad St. could even eclipse that $34.0 million outcome. The industry veteran looks more to the building itself for that conclusion, citing its proven appeal to small- and medium-size companies who have 15 Broad St. filled to the rafters with leases ranging from under 1,000 sf to a 14,300-sf pact involving the top two floors that runs to March 2024.”

0 Boston Office Demand Poised for Best Year Since 2007

Posted on October 12, 2015 by Wil Catlin

The office market continues its upward push with the best year since 2007 and no signs of letting up. Increased rents combined with fewer tenant improvement dollars, increased construction costs and limited rent abatement make the total occupancy cost even higher.

Credit: BBJ

From the Boston Business Journal:

At 13 percent vacancy, Greater Boston notched the eighth-lowest office vacancy rate in the third quarter. That rate has stayed relatively flat, dropping just 0.2 percent year-over-year, the Reis report said…The increased demand for office space is driven by continued gains in the labor market, Reis said.

“Over the last seven years, not only has the number of total jobs created per month gradually increased, but the number of higher-wage, office-using jobs has also increased,” Severino said. “The labor market clearly shifted into a higher gear in 2014 and that is beginning to have a more consistent and material impact on the office market. Vacancy compression is poised on the precipice of accelerating in the next year or so.”

0 Office Space Now Serves as a Recruiting Tool

Posted on October 12, 2015 by Wil Catlin

Credit: Contemporist

Office space is no longer just a place to work, but rather a recruiting tool. Prospective employees not only are evaluating their financial compensation, additionally they investigate the work environment. The new office model encompasses much smaller footprint per employee while many more collaborative areas.

From Boston.com

The recent TripAdvisor and New Balance office unveilings in the greater Boston area have included variations on the same theme: these buildings are necessary to attract young talent.

With their spiffy, modern, amenity-filled new digs, these companies are competing with the likes of Google, Apple, and Amazon to get the top talent in the country and the world.

0 Prime Boston Office Rents Up Nearly 300% in Past 15 Years

Posted on October 9, 2015 by Wil Catlin

Credit: Boston Globe

The city of Boston continues to expand by building more residential and office buildings in areas once thought too far from the mainstream. Industrial and flex users have felt that impact along with office tenants that occupied old industrial buildings that have gone through complete renovations. $12 PSF office rents in the Boston Wharf portfolio from 15 years ago are now in the upper $40’s PSF.

From the Boston Globe:

Yet as real estate prices surge and development pushes into places that were long neglected, the pressures are rising on industrial space all over the city. Boston has just 3.6 square miles of land zoned for industrial use, less seemingly every week. Two prominent properties in the South End, for example, Quinzani’s Bakery on Harrison Avenue and the Flower Exchange on Albany Street, are being sold to developers.

“Not everybody works for Fidelity or Vertex,” said Michael Vaughan, a development consultant who is helping the food wholesalers in Widett Circle negotiate a potential move. “This is how people earn a good living and stay in the city of Boston. The challenge is how do you make sure there’s room for them in a very land-poor city.”

0 Boston’s Untracked Development Tax Breaks

Posted on August 31, 2015 by Wil Catlin

Much time and energy is spent discussing property taxes in the city of Boston. I firmly believe if the city is offering any tax concession then they should track them and be accountable for giving them. By no means should we stop them, rather let’s have a better understanding of how they’re used to benefit the greater good.

Boston development property tax breaks in a map

Credit: Boston Globe

From the Boston Globe:

A Globe review found that city records are incomplete for most of the tax breaks the city awarded during the past four decades. It appears that only recently did the city begin to project how much deals would cost taxpayers.

City Hall could provide cost projections for only 10 major tax deals signed since 2008, totalling an estimated $78 million in lost tax revenue. These include the $9.7 million awarded for the new State Street Corp. office and adjacent garage on A Street, and $7.8 million for the bottom floors of a tower planned for land next to TD Garden.

After the Globe inquired about the city’s incomplete records, the Walsh administration pledged that it would keep better track of the costs of tax deals, almost all of which were signed by previous mayoral administrations.

0 News Office and Retail Space Added to Fort Point Project

Posted on June 17, 2015 by Wil Catlin

22 Boston Wharf Rd.
(Click to view property details)

More new office space and retail is on the drawing board from Berkeley Investments at 22 Boston Wharf Road.

According to the Boston Business Journal, “Berkeley Investments has plans to add two office floors atop the Stillings Street parking garage….[along with proposing] street-level retail to Boston Wharf Road, which is a relatively short connecting road between Congress Street and Seaport Boulevard, as well as additional windows along the side of the building that abuts the Q Street park.”

The BBJ’s overview of the Fort Point project also notes, “the 241,124-square-foot property has an assessed value of $26.435 million this fiscal year, according to the city assessor. Berkeley acquired it in 2004 as part of a $97.05 million acquisition of a swath of Fort Point properties from Boston Wharf Co., a Suffolk County deed shows.”

The full BBJ article is available on its website, here.