STRONG MOMENTUM TO START NEW YEAR
Immense pressure across the Boston and Cambridge markets has caused tenants to consider suburban locations for rent relief and future growth opportunities, however not all suburban locations are created equally. Today’s tenants demand the “Downtown” amenity package which includes fitness centers & locker rooms, on-site conference & dining facilities as well as surrounding mixed-use vibrancy including food & beverage, entertainment and housing.
As Greater Boston’s premier suburban market, the Route 128 loop has garnered global recognition for its proximity to urban markets, excellent infrastructure, distinguished tenant base and top quality assets. During the first quarter, leasing velocity maintained its momentum from last quarter with 313,650 square feet of quarterly net absorption. Vacancy dropped to 9.7% which supported asking rate growth and brought the average asking rate into the high $20’s PSF. Generally speaking, the best performing assets cater to modern tenants including: contemporary lobbies & common areas, fitness & dining services and outdoor spaces in addition to upgraded building mechanicals and infrastructure.
Looking forward, strong regional macroeconomic indicators coupled with strengthening regional demographics have the Greater Boston suburban real estate market positioned for future growth. Over the next 12 months, watch as both investors and tenants acknowledge the growing spread between Downtown pricing and the suburbs and the market adjusts accordingly.