While build-to-suit activity propped up absorption, Greater Boston’s commercial real estate markets ended the second quarter with mixed results. Overall market conditions remain positive, however, growth has slowed to a more moderate pace.
- In the office market, vacancies were flat compared to last quarter as both the Downtown and Cambridge markets posted negative absorption. Biogen’s vacant sublease at 105 Broadway, Whole Foods’ relocation to Marlborough and the demolition of 145 Broadway led to higher vacancies in Cambridge. In the suburbs, the delivery of SharkNinja’s new headquarters in Needham and two large owner-user sales helped the office market post more than 400,000 square feet of demand. Despite a softening in fundamentals asking rents continued to increase; surpassing $33/SF metrowide in the second quarter.
- Given how tight Greater Boston’s lab market has been, any movement in either direction can impact fundamentals. This quarter, positive absorption in East Cambridge was driven by the delivery of the fully-occupied 50-60 Binney Street. Takeda’s now vacant space at 26 Landsdowne Street and former BIND Therapeutics space at 325 Vassar contributed to negative absorption in Mid Cambridge. In terms of construction Alexandria broke ground on 399 Binney Street and King Street Properties is moving forward with a speculative lab building at 828 Winter Street in Waltham.
- Overall demand remained positive in Greater Boston’s industrial market, with build-to-suit construction and owner-user sales bolstering absorption. That said, modest speculative construction and negative absorption in the north markets kept vacancies elevated compared to last quarter. In one of the largest deals of the quarter, 47 Brand purchased the 465,000-square-foot 140 Laurel Street in Bridgewater and plans to occupy the space, which has been vacant since 2009. Asking rents are nearing $9/SF metrowide, with Flex/R&D space within the Route 128 belt garnering top dollar from tenants.