Recap: 2018 CBRE/New England Boston Market Overview

It was a great honor to have both Mayor Marty Walsh and Governor Charlie Baker speak at our 2018 Boston Market Overview.

This year, CBRE/New England representatives from our Downtown, Cambridge, Capital Markets, Suburban, Retail and Industrial teams all gave poignant market insights and takeaways for 2017 while looking forward to the year ahead. The group was moderated by Spencer Levy—Americas Head of Research for CBRE and a senior member of the company’s global research team—who opened the discussion on domestic and international trade, healthcare, taxes, industrial and retail agility, as well as the importance for businesses to follow talent.


Urban (Downtown & Cambridge) – Jon Freni, Senior Vice President/Partner; Carolyn Wheatley, Associate
Freni and Wheatley kicked off their 2018 IMG_2384-2market insights with the ever-present growing industry: co-working. Freni stated, “Tenant or landlord, this will be the big debate in 2018 and will continue to change the way we do business. Whether you like it or not, co-working is here in a big way. Embrace it and look for ways to compete with it.” Freni continued with two additional market insights that are increasing in popularity: ‘spec success’ and risk-reward deal structures.

Wheatley spoke of three market insights in Cambridge: the increasingly life-science-driven tenant base for both office and lab space, spec developments that meet the supply needs of the low vacancy market, and market risk-reward deal structures that are currently landlord-favored.

Capital MarketsDave Pergola, Executive Vice President/Partner
Given the complexity of investing in New England commercial real estate, Pergola broke the investment market into three categories.


“In closing, CBRE/NE believes that if you have some conviction and the right type of capital to invest, the best opportunities in 2018 will be large, high-quality suburban office buildings.”


Suburban OfficeAlison Powers, First Vice President
Powers started off her talk by debunking a common 2017 theme. “[…] despite the headlines signaling otherwise, the market was actually quite active in 2017 fueled by an incredible amount of leasing velocity driven by organic growth (I promise you not every suburban tenant moved to the Seaport) as well as continued momentum from the life sciences sector.”


A select number of suburban landlords thrived because their space was large, scalable, high-quality and/or new real estate, with amenities and an accessible location.

RetailMatt Curtin, Senior Vice President/Partner
Next up was Matt Curtin who spoke about how changing consumer behaviors are forcing both retailers and landlords to step it up. He mentioned L.L.Bean and lululemon as two examples of traditional retailers who have integrated experience into their lifestyle brands. L.L.Bean will offer kayak and paddle board at its new Seaport Square location and lululemon offers fitness classes inside and outside of their stores. Matt also highlighted how entertainment concepts, craft beer, fast-casual restaurants, mobile app ordering and “clicks to bricks” retail trended in 2017 and is expected to blossom in 2018.


IndustrialRachel Marks, Vice President
Rachel Marks closed out the market talks by focusing on the importance of industrial warehouses in Greater Boston as consumer expectations of convenience continue to grow, and people are comfortable buying more online. The changing habits of consumers force omni-channel distributors to deliver product quickly and inexpensively, which means they now need to occupy space close to large population centers like Boston. Other demand drivers in the industrial market include breweries, marijuana cultivators, biopharma manufacturing, technology and medical devices. With all this demand, there is currently a major shortage of quality industrial supply in New England.

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Visit the CBRE/New England Vimeo page for videos from the event. Stay tuned for our next post, where we will reveal what our Hartford experts covered at this year’s CBRE/NE Hartford Market Overview.

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Just Released: CBRE/NE 2018 New England Market Outlook


Building Today for a Stronger Tomorrow: CBRE Cares Year in Review

CBRE Cares-NE Logo_342CBRE Cares New England continues its mission “to build a foundation for our community by facilitating a variety of volunteer and giving opportunities that have a significant effect on the lives of families in need—building today for a stronger tomorrow.” Designed to harness the aggregate potential of CBRE/New England’s over 28 MSF property management portfolio, events are coordinated to engage both CBRE/NE tenants and employees. Over the past year, CBRE Cares New England organized the following charitable activities:

Food Drive: Over 2,600 Pounds of Food Collected

2017_Food Drive_CaptivateIn March, CBRE Cares New England facilitated its eighth annual Food Drive to collect and distribute non-perishable goods to families in need across New England, partnering with The Greater Boston Food Bank, Loaves & Fishes, Rhode Island Community Food Bank and New Hampshire Food Bank. Over the course of just two weeks, CBRE Cares New England collected a total of over 2,600 pounds of food donations, amounting to 10,400 meals created!

A capping off event took place on April 12th, atfood-drive-3.jpg the Greater Boston Food Bank (GBFB) in Boston, Massachusetts where CBRE/NE volunteers joined a host of directors and volunteers to help achieve GBFB’s mission of ending hunger in eastern Massachusetts. Over the course of the day, CBRE/NE volunteers helped sort 19,450 pounds of food making it possible for the GBFB to supply over 14,000 meals to those in need.

An additional capping off event took place on March 9th at the Foodshare Bloomfield, Connecticut food bank. Foodshare receives food donations from the food industry and sorts and distributes the donations to 300 food pantries, community kitchens, homeless shelters and other partner programs. The CBRE/NE volunteer group sorted 8,100 pounds of food that was donated by Stop & Shop. This food would have otherwise been thrown away.


Footwear Drive: Over 1,000 Pairs Collected

CBRE Cares Shoe drive_captivatePartnering with the Massachusetts, Connecticut and Rhode Island Goodwill Chapters as well as Children’s Friend in Rhode Island, CBRE Cares New England facilitated its first Footwear Drive. Over 1,000 pairs of socks and new or gently used shoes were primarily distributed to local Goodwill chapters across New England. The network of 162 independent, local Goodwills in the United States and Canada offers customized training and services for individuals who want to find a job, pursue a credential or degree, and strengthen their finances. Donations were also given to Children’s Friend of Rhode Island, Rhode Island’s oldest child welfare organization and a leading provider of child welfare, family support, mental health and child development services.

Iphoto4n combination with this drive, on May 25th, CBRE/NE employees volunteered their time at the Cradles to Crayons Giving Factory. Volunteers enjoyed a day of fun and service as they created “KidPacks” to help Cradles to Crayons work towards their mission of providing basic necessities for children in need. In addition to putting together these packages of clothing, toiletries, bedding, diapers, books and more for individual children, volunteers spent the second half of the day sorting children’s clothing donations. At the end of the day, 270 children in need were helped by our team!

Hartford Area Habitat for Humanity: Construction Started on Six Houses

On June 29th, CBRE/NE employees volunteered at the Hartford Area Habitat for Humanity. CBRE/NE volunteers were tasked with framing and doing preliminary stage construction tasks. This project, part of a 22-unit development on South Marshall Street, has been completed, and in December six new homeowners received keys to their new homes. Unknown-1

Back-to-School Supplies Drive: Over 3,500 Items Collected

By providing kids with the tools so many take for granted, our Back-to-School Drive allows kids to focus on what’s really important—their schoolwork. CBRE Cares New England partnered with a host of Boys & Girls Clubs around New England to collect and diCBRECares_BackToSchoolDrive_InternalScreen(landscape)stribute 1,780 supplies for less fortunate children. The mission of Boys & Girls Clubs of Boston is to help young people, especially those who need us most, build strong character and realize their full potential as responsible citizens and leaders. In addition, over 1,800 items were collected and used to fill more than 30 backpacks with back-to-school supplies in partnership with the Capital Region Education Council, who working with and for its member districts, has developed a wide array of cost-effective and high-quality programs and services to meet the educational needs of children and adults in Greater Hartford. CBRE/NE employees and tenants pulled off our fourth Back-to-School Drive without a hitch and just in time for the first day of school!

4In conjunction with this drive, on September 18th volunteers partnered with Boston Cares leaders once again, but this time to build twin bed frames that were distributed through agency partners to families transitioning out of homelessness in Greater Boston. In total nine beds were constructed from start to finish by our team of volunteers. Then on October 6th volunteers set out once again to give back, this time for a maintenance and beautification project at the Boys & Girls Clubs of Boston Charlestown location. Volunteers were put to work around the Boys & Girls Club doing various projects such as painting, gardening and cleaning, all in support of the organization’s commitment to helping the young people in the community succeed academically, live healthy lifestyles and practice good citizenship.


Toys for Tots/Gift Giving Drive: Over 1,600 Toys Collected

During the 2017 holiday season, CBRE Cares New England organized a Toys For Tots/Gift Giving Drive to allow local disadvantaged children and families to experience a happy holiday and provide them with a message of hope. Donation stations were established in all participating buildings where employees and tenants dropped off new gifts to benefit local kids in need. Over 1,600 gifts were collected on behalf of the U.S. Marine Corps Reserve Toys for Tots Foundation and other local charities.

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Office remains steady while lab charges ahead


Short on time? Here are the highlights of our third quarter Cambridge Office & Lab MarketView. To request the full report, fill out the form at the bottom of this post.

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The Cambridge Office market posted its best three months of the year in the third quarter. Absorption was a respectable 59,000 sq. ft. and asking rents continued to rise, reaching $68.35 per sq. ft. Premium spaces saw interest; however, there is not much premium space on the market, and lower-quality options received a tepid reception. This caused availability and vacancy to increase over the last year. Expansions by existing tenants were the primary driver of demand, and two of the three largest office leases this quarter were deals of that type.

Demand for lab space in Cambridge is as strong as it’s ever been. The market saw positive absorption of over 684,000 sq. ft., the highest since the first quarter of 2012. It’s a welcome return to form after a few lackluster quarters, and brings year-to-date absorption up to 568,000 sq. ft. With such a large amount of absorption, availability and vacancy dropped from 11.7% and 4.5% last quarter to 6.6% and 2.0%, respectively. The spaces that came off the market were mostly premium offerings, leaving a small number of less desirable and less expensive options available, causing average asking rents to fall.


Cambridge turns in another solid quarter… for now


Short on time? Here are the highlights of our first quarter Cambridge Office/Lab MarketView. To request the full report, fill out the form at the bottom of this post.



With the question of the day being whether the market has reached its peak, many have pointed to the fact that Boston rents are still well below their 2008 peak as evidence that there is still room to run. But does Boston proper alone still present the full picture of the market, or has the epicenter of demand shifted to the other side of the Charles?

The rental spike in Boston that preceded the 2008 collapse saw growth of 89.9% from trough to peak. By comparison, East Cambridge office rents have grown 110.1% since 2011. Whether Cambridge is the new bellwether of the Boston market remains to be seen, but signs of caution have already been sighted in the city.

This is not to say the Cambridge Office market is struggling by any definition. Indeed, the first quarter statistics remained robust across the board. Asking rents—already the highest in Greater Boston— continued to see very slight upward growth, absorption was in the black and vacancy was only 3.6%.


In the last few years, finding lab space in Cambridge has been challenging even for those that could afford it. In response, developers and investors have been rapidly putting steel in the air, and more have plans underway to do the same.

At North Point, DivcoWest’s new megaproject near Lechmere, 430,000 sq. ft. of lab space is on the table, while other buildings spearheaded by MIT and Alexandria are already underway to service the pent-up lab demand.

But much like the office side, Cambridge lab demand has been waning of late, leading some to wonder whether these new projects will come online too late in the cycle and only exacerbate a softening market. 


Lowest Vacancy, Highest Ranked: Cambridge Leads the Nation

netherwood-schwesig_evianne_e2By Évianne A. Netherwood-Schwesig, Senior Research Analyst | Creative & Analytics

For anyone familiar with the world of commercial real estate in Boston, it’s well known that Cambridge has been the hottest office market in the last few years. Demand for space, particularly around Kendall Square, has driven rents into the stratosphere and left only small scraps of availability in its wake.

Dramatic descriptions? Maybe not. According to new national rankings by CBRE Research, Cambridge’s metrics aren’t just impressive at a local level. The city boasts the lowest office vacancy rate nationwide, at just 3.8%. This is head and shoulders above runner-up Nashville, which landed at 4.7%. At $65.26 per sq. ft., asking rents in Cambridge were the fifth highest in the country, bested only by a pair each of New York and San Francisco markets. It’s worth mentioning that Boston proper also did itself proud: among all urban markets, its 7.3% vacancy rate and $55.71 per sq. ft. asking rent put it in seventh and eighth place, respectively.


Lowest Office Vacancy Rates:

Rank All Markets Rate (%)
1. Cambridge 3.8
2. Nashville (Suburban) 4.7
3. Oakland (Downtown) 5.1
4. San Francisco, (Downtown) 6.3
5. Manhattan, Midtown South 6.5
6. San Jose (Suburban) 7.2
7. Boston (Downtown) 7.3
8. Walnut Creek/I-680 Corridor 7.8
9. Manhattan, Midtown 7.9
10. San Francisco, (Suburban) 7.9

Source: CBRE Research, Q4 2016

Highest Office Asking Rents:

Rank All Markets Rent
1. Manhattan, Midtown $83.54
2. San Francisco, CBD $72.77
3. Manhattan, Midtown South $71.37
4. San Francisco, (Suburban) $68.28
5. Cambridge $65.26
6. Manhattan, Downtown $59.16
7. San Jose (Suburban) $58.34
8. Boston (Downtown) $55.71
9. Washington, D.C. (Downtown) $53.61
10. Oakland (Downtown) $52.56

Source: CBRE Research, Q4 2016

Recap: 2017 CBRE/New England Boston Market Overview – Part 1

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It was a great honor to have both Mayor Marty Walsh and Draft Kings CEO Jason Robins speak at our 2017 Boston Market Overview earlier this month. Keeping with the DraftKings fantasy sports theme, this year CBRE/New England representatives from Urban and Suburban leasing as well as our Capital Markets group reflected on last year’s MVPs and then selected their draft picks (predictions) for the upcoming year.

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Mayor Marty Walsh, Jason Robins, John Butterworth & Andy Hoar

And so it began… with the kick-off from the 35-yard line, Andy Hoar, CBRE/NE President/Co-Managing Partner, set the pace for the morning’s program. John Butterworth, Executive Vice President/Partner of Urban Brokerage, introduced Mayor Marty Walsh, who has gone the distance up and down the field many a times, returning kick-offs from a variety of developers with hopes to score a touchdown in Boston.



Making moves past the first-down marker, Spencer Levy, Head of Americas Research for CBRE, carried the ball a bit further down field and opened the discussion on domestic and international trade, immigration, taxes, the power of voice, regulation, infrastructure and management style.

On draft day, every team has an opportunity to reflect and rebuild for the next season. Our CBRE/NE speakers did exactly that by presenting their 2016 highlights, in addition to their new year predictions. The game plan was presented and the players were ready to take the field.

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Urban (Downtown & Cambridge) – Meredith Christensen, Vice President; Adam Brinch, Senior Vice President/Partner

Draft Pick #1: Out-of-Market Tech Demand

“Much like Tom Brady is the New England Patriots’ obvious pick for the 2016 MVP, out-of-market tech-driven demand is my obvious pick for the 2016 MVP.” – MC

Draft Pick #2: Cambridge 2016 MVP = Organic Growth

“While Downtown’s headlining deals came largely from out of market, in 2016 the Cambridge market’s MVP was…ORGANIC GROWTH! From Facebook to Amazon, Akamai to Hubspot, and Takeda to Shire, you’ve got some serious firepower reiterating the case for the connection to MIT and Harvard. The combined market cap for these 10 companies that executed expansion deals during 2016 is $1.8 trillion.” – AB

Draft Pick #3: Cambridge 2017 Player to Watch = New Development


“The current development cycle has delivered 16 new projects totaling 4.2 MSF in Cambridge. That represents a supply growth of 22% over the past nine years.” – AB

Draft Pick #4: Downtown 2017 Player to Watch = VIBE Drives Velocity

 “Vibrant neighborhood, Innovative design, Bold amenities and an Entrepreneurial ecosystem. Simply,VIBE drives velocity.” – MC

Draft Pick #5: Urban Flex Pick = The Redefinition of Lab

“With Cambridge lab demand currently floating around 2 MSF of active requirements, demand is outpacing available supply by more than two and half to one.” – AB

Stay tuned for our next post, where we will reveal the draft picks from our Suburban and Capital Markets teams, along with Jason Robins’ keynote highlights. Here’s a quick snapshot of what to look forward to in this special CBRE/NE mini-series: