|
Rents throughout Greater Boston in the Class sectors continue to climb, although at a slower rate. In Downtown Boston, only one modest-sized new building scheduled for delivery in 2009 has been started. Other major deliveries of new construction are unlikely until 2010, and leasing opportunities for state-of-the-art space are severely limited. View space in premium towers is renting well into the $80/s.f. range. Cambridge rents for the best space have also jumped to the high $50s. Limited premium space in suburban Waltham has resulted in achieved rents in the mid $40/s.f. range with asking rents now solidly in the mid $40s. Adjacent suburban submarkets such as Burlington are now rapidly closing the gap. Building sales have been sharply curtailed due to the credit situation.
Downtown Boston
Leasing Activity
Recently completed Class A Transactions:
-
Mullen Advertising will relocate to 40 Broad Street (286,000 s.f., Class A) in Boston’s Financial District from the headquarters it has occupied for the last twenty years in the north shore suburban community of Wenham. Mullen will occupy 100,000 s.f. in July 2009 on the top four floors of the 11-story rehab owned by Transwestern Investment Company. This transaction comes on the heals of advertising firm Hill Holliday’s announcement last quarter that it leased 110,000 s.f. for occupancy in January 2009 at 53 State Street nearby.
-
Arrowstreet Capital subleased approximately 30,000 s.f. at 200 Clarendon Street in the John Hancock Tower in the Back Bay. Arrowstreet will occupy the 30th floor for a seven-year term. 200 Clarendon Street is a Class A premium office tower built in 1974, currently 80 percent occupied.
-
Bracebridge Capital signed a lease for 20,000 s.f. at 500 Boylston Street (708,000 s.f., Class A) on the 18th floor. The company will lease the space for a new 10-year term. The premier office building, located in the Back Bay, was built in 1930 and renovated in 1988, and is currently 80 percent occupied.
Active requirements in play:
-
Active requirements total 4.3 million s.f., slightly lower than the 4.5 million s.f. in October, reflecting leasing completed in the fourth quarter.
-
The eight largest requirements in the market range from 100,000 s.f. to over 250,000 s.f. and include:
-
Financial Service firms –Deloitte & Touche LLP, Putnam Investments, Bank of America, Citizens Bank, and KPMG LLP.
-
Law Firms – Brown Rudnick Berlack Israels LLP, Burns & Levinson, Seyfarth Shaw LLP
-
Consulting – JP Morgan, Charles River Associates
-
Government – U.S. Environmental Protection Agency, Mass Department of Environmental Affairs, and the U.S. Federal Bureau of Investigation.
-
Venture Capital/Investments – Bain Capital Inc.
Building Sales
-
Meritage Properties sold 18 Tremont Street (202,040 s.f., Class B) to BPG Properties. The new owners paid $49.5 million, or $245/s.f., for the asset, which was built in 1902 and renovated in 2001. The building was 87 percent occupied at the time of sale.
Cambridge
Leasing Activity
Transactions completed in the last 90 days include:
-
Akamai Technologies signed a lease to renew and expand their current head quarters at Eight Cambridge Center, along with four floors at Four Cambridge Center. With the expansion of 110,000 s.f., Akamai will ultimately occupy 250,000 s.f. between the two, Class A Cambridge office buildings by June 2009.
-
Senior Whole Health signed a 10-year lease to renew and expand at 58 Charles Street. Senior Whole Health will now lease the entire 47,912 s.f., Class B office building, built in 1899 and rehabbed in 1984.
Active requirements in play:
-
There currently are 911,200 s.f. of active office space requirements in Cambridge, up slightly from 817,000 s.f. in October. This accounts for leases by Akamai Technology and others in Cambridge and Altus Pharmaceuticals in the suburbs.
-
Consulting firms include Camp Dresser McKee (CDM) seeking 270,000 s.f. and Forester Research seeking 40,000 s.f.
-
Computer software firms include Sapient Corporation and VeriSign each needing 40,000 s.f.
-
Office users needing large blocks of space have few options since new construction has been focused on Lab space.
-
Lab requirements total 660,000 s.f., up from 516,000 s.f. in October. Vertex Pharmaceuticals dominates, seeking 400,000 s.f.
Building Sales
-
Alexandria Real Estate Equities Inc. acquired The Athenaeum Center (370,000 s.f., Class A) from Capital Properties for $150 million. The sale represents a $394/s.f. price for the 5-story, Nationally-Registered Historical Building located at 215 First Street in East Cambridge.
Suburban Boston
Leasing Activity
Transactions completed in the last 90 days include:
-
Altus Pharmaceuticals will relocate from Cambridge to Waltham, having signed a 168,736 s.f. lease at Hobbs Brook Office Park in two three-story, Class A buildings:
-
Altus will occupy the former Tufts Associated Healthplan space at 333 Wyman Street totaling 83,306 s.f.
-
They also leased 85,430 s.f. of space at 610 Lincoln Street North, which allowed GPC Biotech to negotiate a termination agreement after announcing that they were closing the Waltham operation.
-
Enterasys Networks Inc. has leased 151,900 s.f. at 50 Minuteman Road in Minuteman Park in Andover. The three-story, Class A office building was built in 1987 and is owned by Brickstone Properties.
-
State Street Corporation has signed a five-year lease renewal on 100,000 s.f. at 2 Granite Avenue in Milton. State Street is the sole occupant of the four-story, 100,000 s.f., Class A office building located south of Boston.
-
Synopsys has renewed on 55,000 s.f. of space at 377 Simarano Drive in the Marlborough Corporate Center located in Route I-495 in Marlborough.
-
The May Institute leased 48,063 s.f. of office space at 14 Pacella Park Drive in Randolph. The building is owned by Equity Industrial LP and was once the headquarters of Dunkin’ Donuts. The May Institute signed a five-year lease and will occupy the entire two-story, Class B building.
Active requirements in play:
-
Suburban office requirements remain at 4.7 million s.f., the same level as last quarter.
-
Large tenants currently each seeking from 100,000 s.f. to 500,000 s.f. include Raytheon (the largest), First Marblehead Corporation, Computer Associates, Palomar Medical Technologies, Unica Technology, and Ibasis.
Building Sales
-
Reebok International Ltd. sold 300 Technology Center Drive in Stoughton to Lincoln Property Company. The 329,336 s.f., industrial warehouse built in 1987 was sold for $18.35 million or approximately $55.72/s.f.
-
Colony Realty Partners, LLC acquired two buildings in the Myles Standish Industrial Park in Taunton for $38.8 million ($65.83/s.f.) from BlackRock Realty Advisors:
-
800 John Quincy Adams Road, a 350,326 s.f., R&D/flex facility built in 1985 and renovated in 2001.
-
275 John Hancock Road, a 238,299 s.f., industrial warehouse built in 2001.
Construction Activity
-
No office construction is underway in Cambridge but speculative construction is well underway in the Boston suburbs in Waltham on Route 128, close to the Massachusetts Turnpike. Duffy Associates’ new Class A, 142,666 s.f. building on Waverley Oaks Road in East Waltham was delivered at the beginning of the quarter when Comcast occupied 60,602 s.f. on October 1.
-
Boston Properties is completing 77 CityPoint (Fourth Avenue), a 204,000 s.f., seven-story, Class A speculative building scheduled for delivery early in 2008. It is now nearly fully committed:
-
Phase Forward has agreed to lease approximately 150,000 s.f., with their occupancy scheduled for early 2009. Phase Forward is currently located at 880 Winter Street in Waltham Woods.
-
PRTM (Pittiglio, Rabin, Todd & McGrath, currently located at Bay Colony Corporate Center) will occupy 36,174 s.f.
-
Administaff, Inc., has leased 8,500 s.f.
-
Davis Marcus Partners is constructing a 3-story, 180,000 s.f., Class A office building at 850 Winter Street in its West Campus at Reservoir Woods, with delivery in late 2008 or early 2009.
-
Bulfinch Companies is nearing completion on Trapelo Corporate Center, a 93,823 s.f. building fronting Route 128 that contains 61,054 s.f. of medical/office space. It will be ready for tenant fit-up early in 2008.
-
590 Lincoln Street in the Hobbs Brook Office Park is also well underway in the conversion from an R&D/Flex facility into 84,360 s.f. of Class A office.
-
Delivery is imminent at King Street Properties LLP’s complete rehab of 60 Hickory Drive (56,500 s.f., Class A). Circle Lending, currently located nearby at 69 Hickory Drive and recently purchased by Virgin Money, has signed a lease to occupy 30,000 s.f. at this new 60 Hickory Drive.
-
Several large tenants are also considering lease commitments in other speculative projects under construction for delivery next year in Waltham, underscoring Waltham’s prominence on Route 128
-
In Boston, Two Financial Center, owned and developed by Lincoln Property Company, is now under construction. The 12-story, 213,366 s.f., Class A office building is scheduled for delivery in late 2009.
|
