Q4-2017-MarketReport-WEB
OFFICE STATISTICS DOWNTOWN
Vacancy and Net Absorption
DOWNTOWN
TOTAL INVENTORY (SF)
TOTAL VACANT (SF)
TOTAL VACANCY RATE
Q4 NET ABSORPTION (SF)
YTD NET ABSORPTION (SF)
ASKING RENT ($/SF)
Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017
0% 2% 4% 6% 8% 0% 2% 4% 6% 8% 10% 12% 10% 12% 0% 2 4 6% 8% 10% 12%
-200,000 -100,000 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 -2 , -1 , 1 , 2 , 30 , 400,000 500,000 600,000 700,000 800,000 900,000 -200,000 -100,000 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000
Class A
48,818,271
3,717,022
7.6%
219,617
128,951
$62.51
Vacancy and Net Absorption
Class B
20,887,991
1,713,292
8.2%
173,964
40,863
$49.22
Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 2 6 3 016 4 6 1 7 2 7 3 7 4 7
CLASS A & B TOTAL
69,706,262
5,430,314
7.8%
393,581
169,814
$58.28
Vacancy and Net Absorption
VACANCY AND NET ABSORPTION
TRENDS • Strong positive absorption in the fourth quarter brought vacancies down to 7.8%. With several large expansions nearly finalized, the Downtown market should see continued improvements in the coming quarters. • The Back Bay is coming into its own, with the tech, e-commerce and coworking sectors driving growth. Wayfair, WeWork and DraftKings are committed to large blocks of space across a handful of towers here. • New construction in the Seaport continues to attract tenants. Aptiv leased two floors at 100 Northern Avenue and Viviant’s lease on the 7th floor of 101 Seaport brought the building to full-occupancy. Cengage Learning is planning to relocate to 117,000 square feet at Pier 4 in late 2018 as well. • Corporate tenants are increasingly looking for flexible lease options within coworking spaces. At WeWork’s newest location, 1 Beacon Street, a single-user is committed to nearly half of the space and Blackbaud recently committed to a full floor in their North Station location at 200 Portland Street.
Q4 2014
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Q1 2017
Q2 2017
Q3 2017
Q4 2017
Net Absorption
Vacancy
Q4 2014
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Q1 2017
Q2 2017
Q3 2017
Q4 2017
Net Absorption
Vacancy
Class A & B Rents
$70
Q4 2014
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Q1 2017
Q2 2017
Q3 2017
Q4 2017
$60
Net Absorption
Vacancy
Class A & B Rents $50
CLASS A & B RENTS
$40
$70
$30
$60
$20
$50
Class A & B Rents $10
$70 $30 $40 $0
• In addition to Amazon’s HQ2 requirement, the e-commerce giant is reportedly in the market for another 500,000 to 1 million square feet in Boston.
Q4 2014
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Q1 2017
Q2 2017
Q3 2017
Q4 2017
$60 $20
Class B Class A
• Nordblom is making a big play in the outskirts of Boston. Its 232,500-square-foot speculative development at 321 Harrison Avenue in the South End could break ground in March and they have proposed a massive mixed-use development at the former Globe site in Dorchester.
$50 $10
$40 $0
Q4 2014
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Q1 2017
Q2 2017
Q3 2017
Q4 2017
$30
Class B Class A
$20
NOTABLE TRANSACTIONS
$10
RECENT CONSTRUCTION Recent Construction
$0
TENANT
ADDRESS
SIZE
SUBMARKET
TYPE
Q4 2014
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Q1 2017
Q2 2017
Q3 2017
Q4 2017
800,000
Relocation/ Expansion
Rapid7
80 Causeway Street
147,000 North Station
Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018
700,000
Class B Class A
600,000
Renewal/ Expansion
Recent Construction
JPMorgan
451 D Street
140,000
Seaport
500,000
40 ,0
800,000
20 Custom House Street
Renewal/ Contraction
Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 4 0 6 1 7 2 7 3 7 4 7 1 8 2 8
Safety Insurance
75,411 Financial District
300,000
700,000
20 ,0
600,000
Recent Construction 500,000 10 ,0
WeWork
1 Beacon Street
66,258 Financial District
Expansion
500,000 100,000 600,000 200,000 700,000 300,000 800,000 400,000
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Q1 2017
Q2 2017
Q3 2017
Q4 2017
Q1 2018
Q2 2018
Q3 2018
Q4 2018
Q1 2019
Aptiv
100 Northern Avenue 62,000
Seaport
Expansion
Leased Available
0
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 20 6
Q3 2016
Q4 2016
Q1 2017
Q2 2017
Q3 2017
Q4 2017
Q1 2018
Q2 2018
Q3 2018
Q4 2018
Q1 2019
400,000
www.naihunneman.com
303 Congress Street Boston, MA 617.457.3400
3
300,000
Leased Available
200,000
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