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.
Back Bay’s newest office building continues to attract tenants as Accenture announces its move into 52,340 square feet of space. 888 Boylston Street is Boston Properties’ new 17-story 425,000 building. The complex also includes 800 Boylston Street, 101 Huntington Avenue and 111 Huntington Avenue.
According to the BBJ, “Boston Properties developed 888 Boylston, a 17-story, $275 million office and retail building in Boston’s Back Bay. The property was designed to be ‘the most sustainable building in Boston,’ said Bryan Koop, Boston Properties’ executive vice president.”
More details on Accenture’s move to 888 Boylston Street are available on the Boston Business Journal, here.
Credit: Boston Herald
Boylston Street in Boston’s Back Bay is expensive, but not too expensive. In the 2nd quarter of this year my company signed an expansion and renewal at 745 Boylston Street after conducting a thorough search for alternate options. We chose to stay and expand based on our attraction to the area’s amenities, proximity to highways and our customers.
Office rents on Boylston Street, however, do rank among the priciest in the country, according to the Boston Herald.
From the Boston Herald:
The Back Bay’s main thoroughfare has an average rent of $67.44 per square foot, thanks to its marquis office properties and tenant list dominated by hedge funds, and private equity and law firms, according to a report by Jones Lang LaSalle, a Chicago commercial real estate company…Those factors have allowed Boylston Street landlords to raise rents 1.3 times faster than on other cities’ most expensive streets since 2013, the JLL report states. And Boston Properties’ 888 Boylston St., a 17-story office tower set for completion next summer, already has signed record-high leases.
The Back Bay office market seems to be to pushing north of pre-cash pricing and vacancy rates, but there is still concern for construction of spec office buildings.
“Despite a single-digit vacancy rate in Boston’s Back Bay offices, two major developments remain idle, waiting for better market conditions,” a Boston Business Journal report notes.
The editorial on the Boston Business Journal web site, offers specifics on vacancies in the Back Bay real estate market, along with information on the delayed office developments.
Related Commercial Real Estate Listings:
Back Bay Office Space