The Class A & B office space in Boston has never been closer than what we are experiencing now. The rents low rise Class A and Class B are near identical with the differentiators being loss factor, amenities and fit up from union versus nonunion general contractors.
According to Bizjournals.com, the four-property portfolio spans a combined 237,434 square feet and was acquired for an average of $379 per square foot, up by $143 from the $236 per square foot paid by Synergy and GreenOak.”
The BBJ continued, noting “the deal is the latest in a wave of local Class B transactions. For example, Webster-based property insurer Mapfre Insurance bought One Winthrop Square in October for $55 million with plans to move some executive offices there. Boston-based commercial real estate firm Winhall Cos. bought Two Liberty Square in September for $28.25 million, up more than $10 million from the $18 million the property had traded for in January 2013. And New York-based DLJ Real Estate Capital Partners in October accquired 18 Tremont St. for $77.5 million.” You can read the full article on the BBJ’s website, here.
If 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.
Boston Realty Advisors represent the 2,162 RSF on the Mezzanine level of 87 Summer Street that is priced in the mid to upper $20’s. This building is owned and managed by Synergy Investments that controls in excess of 3.5 M RSF of Class B product in Boston.
In the heart of Downtown Boston, 87 Summer Street offers cool collaborative space with full floor identities. This property offers Verizon & Comcast with high speed connectivity, and many other local amenities.
87 Summer Street is located within the Downtown Crossing Business Improvement District. Just a short walk to public transportation such as the Red, Orange & Green Line T stops, along with the commuter rail at South Station. There is also a wealth of parking within the area.