Tag Archives: Class A office space in Boston

0 Boston Class A Towers Experiencing Vacancy

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Office space on Huntington Ave. in Boston

Credit: BBJ

What Boston Class A towers are experiencing vacancy in the midst of a strong office market?

According to the BBJ, “many professional services firms are leaving the more traditional high-rise for gleaming new offices — most often on lower floors — in Boston’s Seaport District. And the wave of technology tenants taking their place aren’t interested in paying top dollar to take over high-rise leases. Rather, they have shown a preference to live, work and play at the center of a buzzing urban neighborhood…That’s increasingly left Boston with multiple towers with blocks of high-rise vacancy, as space closer to the ground gets ever more unavailable.”

The BBJ article further notes, “at the end of March, vacancy in high-rise offices (floors 23 and above) in the Financial District was at 16.3 percent, compared with 10.9 percent in mid-rise space (floors 13-22) and 7.4 percent in low-rise floors (1-12), per Cushman & Wakefield research.”

More information is available on the Boston Business Journal’s website, here.

0 Boston High-Rise Office Space: Rents Exceeding $90 per sq. foot

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745 Atlantic Ave office space in Boston

Credit: Bizjournals.com

Boston office rents continue to grow as tenants continue to migrate to downtown Boston high-rise office buildings.

From the Boston Business Journal:

Low-rise and Class B offices are now commanding rents in the mid- to upper $40s range, while high-rise rents are reaching well past the $90 per square foot range, according to second-quarter research from commercial real estate services firm DTZ. Class B office rents are up 21 percent from last year in the Financial District, 12 percent in the North Station region and 20 percent in South Station, DTZ said.

“It’s also worth noting that nearly 25 percent of Boston’s office inventory has traded hands in the past 12 months,” the research report said.
Meanwhile, Cambridge also maintained its post as the strongest real estate market in Massachusetts, with $2.2 billion in sales activity. That’s more than half of the overall $4 billion in total sales volume so far this year, according to recently released second-quarter research from JLL..Direct average rents rose more than 5 percent year-over-year in nine out of 12 of Boston’s submarkets, topping out with 16.3 percent growth in East Cambridge.

0 Office Rent Increases Expected in Prime Boston Locations

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Blackstone_logoIf you need more space or if your lease is near the end of the term, now is the time to secure office space in Boston.  Buildings are trading hands and the new owners will be looking for a return on their investment and will push rents.  In 2007 when Blackstone bought Equity, rents rose 44 percent and other landlords followed suit.

A report on nerej suggests an optimistic future for landlords; “all signs are in place for another major rent move rivaling The Blackstone Effect of 2007. As of Q2 2014 when everything started, vacancy for class A and B buildings in core downtown Boston (defined as Back Bay, Seaport and CBD) was at 8.4%. In Q4 2006, vacancy was at 8.3%. In Q2 2014 average rent for Boston’s core downtown market was $50.32 per s/f; this is $8.56 per s/f higher than Q4 2006…The momentum in the market is similar to 2007. Based on 2007 actual experience, and a move similar to 2007, it would be reasonable to see a “rent pop” up to the $70 per s/f level for core assets. 2007 peaked at $60.15 per s/f. 2015-2016 should add another $10 per s/f, which would result in average rent of $70.15 per s/f during the next 2 years.”

More information is available on the nerej website, here.

0 Definition of Class A Office Space

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What defines Class A office space?

According to CoStar, Class A office space is defined as follow:

In general, a class A building is an extremely desirable investment-grade property with the highest quality construction and workmanship, materials and systems, significant architectural features, the highest quality/expensive finish and trim, abundant amenities, first rate maintenance and management; usually occupied by prestigious tenants with above average rental rates and in an excellent location with exceptional accessibility. They are most eagerly sought by international and national investors willing to pay a premium for quality and are often designed by architects whose names are immediately recognizable. A building meeting this criteria is often considered to be a landmark, either historical, architectural or both. It may have been built within the last 5-10 years, but if it is older, it has been renovated to maintain its status and provide it many amenities. Buildings of this stature can be one-of-a-kind with unique shape and floor plans, notable architectural design, excellent and possibly outstanding location and a definite market presence.

Some notable Class A buildings in Boston:
John Hancock Tower: 200 Clarendon Street
Bank of America: 100 Federal Street
Prudential Center: 800 Boylston Street
Federal Reserve Plaza: 600 Atlantic Avenue
Exchange Place: 53 State Street
One Federal Street: 1 Federal Street
One Financial Center: 1 Financial Center
100 Summer Street: 100 Summer Street
International Place: 1 International Place