Rents Skyrocketing in Select Boston Areas, Cambridge/Kendall Leads WayMay 17, 2016
Unsurprisingly, Kendall has enjoyed the most dramatic surge in rents during the present economic boom, currently going into its seventh year, as local rents bottomed out in 2010 following the mortgage recession. Other areas benefitting from current dynamics include most urban areas as well as the Western suburbs, including 9 West, buoyed by changes in Needham.
Vacancy remains at very low levels as 49,000 sf of positive absorption was balanced with 66,000 sf of new property completions, resulting in a slight vacancy uptick of 0.1 percent, to 5.5 percent.
◊ Effective rents, particularly in Kendall, may be growing faster than quoted rent figures as competition for few spaces has brought about auction situations in certain cases.
◊ Class A options for users in the 20,000 sf to 50,000 sf size range have plummeted from seven to three since the end of 2014.
◊ Recent market activity, most notably the 160,000 sf lease by IBM Watson at 75 Binney Street, highlight the extent to which general technology groups compete with biotech for space in Kendall.
◊ Bayer, the inventor of Aspirin, has announced it will open up an East Coast innovation center in Cambridge, being among the last of the large biopharmas to do so
Courtesy of our partners at Encompass Real Estate Strategy
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