0 Boston Properties Class A Office Rents Experience 76% Surge in Q2

Waltham office space

Credit: BBJ

Class A office rents have experienced a 76% increase in the 2nd quarter for some of Boston Properties local assets. Combine that with reduced tenant improvement dollars and little-to-no rent concession, and the net effective cost to occupy has increased even more.

According to an article in the BBJ, “Boston Properties raised net rents by a median average of 28 percent companywide for tenants with leases starting in the second quarter. But in Boston, Cambridge and the markets along Route 128, that net rent increase shot to 76 percent.”

From the Bizjournals:

“We continue to see the Boston suburban market as having the strongest relative demand growth across our portfolio,” [Boston Properties President Doug] Linde said on the earnings call. “We have more than 400,000 square feet of leases in negotiations from a series of life science, technology and even a few financial services organizations. Leasing velocity in the Waltham, Lexington submarket has accelerated during the last few months as a result of this demand, and much of it is organic expansion.”

0 Office Space in the Greater Boston Suburbs is Heating Up

office space available in Boston suburbs

Credit: B&T

Is Boston office space getting too expensive with vacancy rates just above 8 percent?  Class A Boston assets are trading nearly double pre-recession levels while suburban comparable assets are still trading 23 percent below the pre-recession levels.

According to a post from Banker&Tradesman, “with fewer Boston trophy properties in play this year, investors may bid up demand in top-tier suburban markets…Properties in suburban core markets such as Route 128, Route 9 and Watertown are selling for just 21 percent above the 2006-2007 peak. Properties in all other Boston suburban markets are selling for 23 percent below the peak.”

Additional details are available on Banker and Tradesman.

0 Suburban Office Space Outside of Boston Draws Interest

233 Cochituate Road, Framingham, MA

Office building in Boston suburbs

Moving out to the burbs, who would have thought?  With innovation and technology booming in the greater Boston area, Boston proper is running out of space. With arms wide open, the suburban market place is gearing up and ready to accommodate.

Posh areas have revitalized their sleepy town centers and have agreed that designating suburban land for commercial space must be done in order to utilize the real estate properly. There is a need for housing, there is a need for social adventure, and there is s definite need for space!

Northland Investment Corporations undertook this project as they saw the pressing needs and desires. Back in August, the Town of Waltham underwent a huge makeover, from its quiet town center now being primed to focus on luring the full lifestyle package changing the stereotype of the lethargic 1950’s old school, soda pop Main Street into a modern, young and vibrant center.  When the development of Marc at Moody and Main began many questioned the intent, but this is a great way to bring flair and affordability, convenience, and energy into the region. Situated just 7 miles from the heart of Boston with some of the best transportation in the country, is a plus. A true live, work, play environment has been achieved. With more and more influence and expansion the burbs are not heading back to sleep.
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0 MA Ranks 3rd for Expected IPO’s in 2015

281 summer street in south Boston

South Boston office building at 281 Summer St.

Massachusetts ranks 3rd nationally behind California and New York for 2015 IPO’s from Tech Firms.

The BBJ notes, approximately “588 tech companies across the nation are in the IPO pipeline, running roughly equal to the 590 tech firms that were in the pipeline at this time last year, according to a new report by CB Insight…Massachusetts has the third most tech companies in the IPO pipeline: 44…The top Massachusetts companies include Bit9 of Waltham, Actifio of Waltham, Veracode of Burlington, Simplivity of Westboro, and Dataxu of Boston.”

You can read the full article on the Boston Business Journal’s website, here.

0 Office Space Boom in Boston Area Suburbs

new office building in Needham for TripAdvisor

Credit: Boston Globe

The greater Boston economy is strong with jobs, construction and capital.  Many office users are seeking value while trying to straddle the live-work-play model for their staff.  Not every company can be located within a five-minute walk of South Station, nor can they offer free parking to their employees. What we are seeing is locations that offer infrastructure, reap the benefits of today’s strong office market.

A recent Boston Globe article remarked, “the western suburbs around Route 128 are experiencing a building boom, with new headquarters for growing companies such as TripAdvisor and Vistaprint among five huge developments under construction in Needham, Waltham, and neighboring towns…The attractions of the suburbs include much lower rents and lots of choices. Moreover, the workspaces — either new or newly renovated — are far from the souless corporate boxes of the 1980s that dotted the suburban landscape. The interiors of some new offices look as if they could comfortably fit along Seaport Boulevard in Boston or Broadway in Cambridge.”

Jump over to the Globe’s website for its full article.

0 10 CityPoint in Waltham

In addition to the development taking place on Main Street in Waltham, another mixed-use development offering street level retail and 230,000 square feet of high performance workspace is underway at 10 CityPoint in Waltham.  The new project leased its first-class office space to Wolverine Worldwide for the headquarters of its Sperry Top-Sider, Saucony, Keds and Stride Rite brands. Broker’s focusing on the Mass Pike/128 submarkets are optimistic about the development as they feel it will attract more talent and businesses to the area, helping absorb vacancy in surrounding markets such as the office space in Needham and Newton.

10 CityPoint office space in Waltham

Credit: Wicked Local

Wicked Local offers an assessment of the location’s commercial exposure:

“10 CityPoint, located on Route 128 at the exit 27 interchange, will be seen by more than 400,000 cars per day. The project includes street level retail and restaurant options and 230,000 square feet of high performance workspace, according to Boston Properties.”

0 Watertown Office Market Undergoing Rapid Change

watertown MA

Credit: ProgrammableWeb.com

Pleasant Street in Watertown is undergoing rapid change in regards to new construction and the purchase of existing buildings between there and Waltham. It is becoming a hotbed for CRE investors and start-up tech firms are beginning to trickle in from Cambridge because of how competitive the market is.

Maybe this trend will continue to push out into Greater Boston and will have a long term effect on Needham and Newton office space?

0 The Belclare in Wellesley Takes Shape

Wellesley office building Belclare being built

Credit: Wicked Local

The Wellesley Inn Site, home to a future re-development of Class A residential condominiums, is finally making progress after it has sat vacant for nearly a decade. Maybe this will motivate Ownerships along the Washington Street corridor to capitalize on the “highest and best-use” for their property. With a future influx of residents coming to the area, perhaps local developers will see the need to build additional office buildings in Wellesley and the strong markets surrounding such as Needham and Newton.

Wicked Local offers the following quote from John Warshaw, developer of Belclare in Wellesley:

“It was a bit of a challenge at the beginning to get people interested,” [Belclare developer Jordan Warshaw] said, “Once it got going there’s been great momentum.” After only a few months on the market, Warshaw said that nearly half of the new units were spoken for. Eight months into construction the residential units are nearly sold out.”

 

0 Why are they leaving Waltham for Boston and Cambridge?

Kendall Square commuters rely on the T to get to work in Cambridge, Ma

Credit: MIT

Why are the V.C. firms leaving Waltham for Boston?  Is it traffic and higher priced rents?  No, the customer is there.  Downtown Crossing (DTX) has evolved to being a hot bed of new technology companies that wanted a few simple items.  Rents; looking for an affordable option, DTX has Class B rents ranging from the mid to upper $20’s to the mid to upper $30’s PSF.  The swing in price is due the specific location, the build out of the space and the condition of the overall building.  In addition some buildings have a staffed lobby, while other operate on a key FOB system.

Location; emerging companies are competing for a hot commodity, talented staff.  Location becomes a huge factor what that young employee doesn’t own a car and relies on the T to get them around.  DTX is uniquely positioned at the Red, Green, Blue and Orange lines.

So, that is why the V.C. firms are moving back to the city to pay Class A rents that can start in the upper $40’s PSF and beyond?

The latest Venture firm to vacate Waltham for Boston or Cambridge? North Bridge Venture Partners.

From betaboston.com:

North Bridge Venture Partners, based in Waltham, is planning to move to Boston or Cambridge some time later this year, said general partner Michael Skok. “Our leanings are toward the Innovation District or Downtown, mostly based on entrepreneurs saying it,” Skok said.

The Betaboston.com article on North Bridge Venture Partners is available in full, here.

 

0 Waltham, Newton, and Burlington Office Markets Gaining Popularity

Office Space in Newton at 60 Wells Avenue

60 Wells Avenue in Newton

Is there a mass exodus from the city?  Well, no. Companies are continuing to flock to markets that benefit their customers, employees, and work atmosphere. If office locations were solely based on price then we would see the tweener markets benefit.  As we know, there are many contributing factors; in some cases public transportation is the driver, for others it could be the think tank of Kendall Square.  Vacancy rates in the city and surrounding office markets have all benefited from the stronger economy.

A study discussed in the Boston Globe, notes “Waltham is the hottest office market in the state outside of Boston and Cambridge, leading a surge in corporate real estate activity along the Route 128 corridor…but Burlington and Newton are not too far behind.”

Jump over to BostonGlobe.com to read more.