By Mark Clayton, Executive Managing Director of Development & Project Management
- This past year, a noticeable rise was seen in construction costs. For both labor and material costs, there was an increase of approximately 3.5-5% in the Boston market.
- The Boston market’s average construction costs are higher than the rest of the country, ranging from $110-125 per sq. ft. This compares to a national average of about $100 per sq. ft.
- Due to the higher-than-normal volume of work in the Boston market, when choosing a consultant, it is important to evaluate their existing workload to ensure they have the capacity to meet expectations.
- Most new space designs are moving away from traditional office concepts and in the direction of a more open and collaborative environment.
- Furniture and AV components have become a critical part of the open environment concept, adding to overall first-time costs.
- Workplace strategy has become a buzzword in the industry. Understanding how and where people work is critical in the initial design process, and providing flexibility for employees has become a competitive differentiator.
- Due to the volume of work in the City of Boston, the overall permitting process timeline has been extended, which should be taken into consideration when reviewing a complete construction schedule.
Interested in reading more of our spotlights? Look no further. Read more in our 2017 Market Outlook.
As New England’s largest commercial real estate services company, CBRE/New England (CBRE/NE)—led by its dedicated professionals—has a significant impact on the industry and the communities in which its employees live and work. Each professional represents CBRE/NE in their neighborhoods, and the company fully appreciates the importance of that responsibility. The motto, “Building on Compassion,” is a regional and national call-to-action that will challenge our employees to expand their leadership positions in their communities by supporting charities and rebuilding lives.
CBRE/NE manages approximately 36 million square feet of properties across New England and the CBRE Cares New England program is designed to harness the aggregate potential of CBRE/NE tenants and employees. In 2016, participants contributed towards several causes that included days of service paired with similarly themed collection drives.
Food Drive: Over 2,500+ Pounds of Food Collected
In conjunction with a variety of local food pantries affiliated with Feeding America, CBRE Cares facilitated its seventh annual Food Drive in March to collect and distribute non-perishable goods to families in need across New England. Over the course of just two weeks, CBRE Cares collected a total of over 2,500 pounds of food donations. Our Connecticut team also bagged two tons of apples for Foodshare, a local initiative founded on the mission of ending hunger in the state.
A capping-off event took place on March 3 at the Greater Boston Food Bank (GBFB) where CBRE/NE volunteers united with directors to help achieve GBFB’s mission of ending hunger in eastern Massachusetts. Over the course of the day, we had 60 volunteers who contributed to sorting 13,754 pounds of food, making it possible for the GBFB to supply 10,798 meals to those in need.
Put Your Clothes to Work Drive: Over 3,000 + lbs Collected
In June, CBRE Cares partnered with the Goodwill Clothing Collaborative and participated in its “Put Your Clothes to Work Drive.” Gently used and clean professional and business attire were collected at buildings across our portfolio. CBRE/NE collected and distributed over 3,000 pounds of clothing for aspiring professionals. Over 500 individuals who are enrolled in job training programs now have access to these donations, free of charge, to help establish their interview and professional wardrobe.
On June 9, CBRE/NE teamed up with Cradles to Crayons for a day of service at their Brighton Giving Factory. Volunteers enjoyed a day of fun as they created “KidPacks” to help Cradles to Crayons work towards their mission of providing basic necessities for children in need. At a separate event in August, several employees helped 188 people pick out wonderful new outfits to give them the confidence to make a great impression and ace any upcoming job interviews.
Book Drive: Over 2,700 Books Collected
By providing kids with the tools so many take for granted, our August book drive allowed kids to focus on what’s really important—enjoying a good book and expanding their imagination.
CBRE Cares partnered with the United Way to collect and distribute over 2,700 books to children across the region.
Bed Build: 30 Beds Built
On October 21, CBRE/NE volunteers worked together to build furniture for toddlers to fulfill a basic need that most of us take for granted—a bed. Beds were distributed through agency partners to families with children transitioning out of homelessness and foster care. Our partner, Boston Cares, has worked with skilled furniture makers to develop a simple bed design and assembly process that allows volunteers with minimal training or experience to produce beds that are attractive, sturdy and easy to assemble.
Toys For Tots/Gift Giving Drive
During the holiday season, CBRE Cares organized a Toys for Tots Drive to allow local underprivileged children and families to experience a happy holiday. The drive recently wrapped up, but donations are still being made to the properties throughout our portfolio. ‘tis the season of giving after all!
Our employees and tenants always find time to give back to our local organizations throughout the year and some individuals make the extra effort to volunteer on their own time. Read more about their efforts here.
Short on time? Here are the highlights of our third quarter Downtown Boston marketview. To request the full report, fill out the form at the bottom of this post.
The Downtown Boston Office market sustained consistent activity through the summer, with overall market conditions continuing to put Boston in the top-performing markets across the country.
Overall Class B rents continue to reach historical highs, ending the quarter at $45.51 per sq. ft, as companies are using real estate to impact culture change more than ever.
The modernized amenity offerings that have been created in Class A buildings in order to compete with creative Class B space have now become the norm. Will we start to see Class B assets creating similar amenities to maintain competitiveness?
In the CBD, traditional professional services firms continue to shrink office footprints to increase efficiency. Availability increased by 10 basis points (bps) while vacancy increased by 30 bps, ending Q3 2016 at 7.7%.
Boston Properties delivered 888 Boylston Street, the newest high-rise building to the Back Bay submarket since 2001. Setting a new benchmark in sustainable buildings, the project was 77% pre-leased upon delivery.
The Seaport continues to attract out-of-market companies. Red Hat announced a 40,000 sq. ft. urban office at 300 A Street. America’s Test Kitchen leased 52,000 sq. ft. at the IDB at 21-25 Drydock Avenue.
To request the full report, please submit this form:
CBRE/New England recently hosted a panel discussing General Electric’s decision-making process behind its relocation to Boston. The event was held at The Fallon Company’s newly constructed 100 Northern Avenue and the panelists were GE’s Ann Klee, Vice President, Boston Development and Operations, CBRE’s Brent Woodruff, Executive Vice President within the Global Workplace Solutions group, Gensler’s Doug Gensler, Managing Director, Principal and CBRE/NE’s Andy Hoar as moderator.
Ann Klee discussed the comprehensive decision-making process for the evaluation of a potential headquarters relocation. Her internal team created a set of 85 criteria used to thoroughly evaluate options, in addition to the analysis separately conducted by the CBRE team led by Woodruff, Hoar and Bill Crean. Early in the process, Woodruff brought in CBRE’s Labor Analytics Group, providing data and insight to help narrow the initial list of 40 markets down to eight. Presentations by city officials and market tours helped to further narrow down the selection pool. Meanwhile, Klee and her team always referred back to their original criteria list—a practice Klee stated was critical in making objective evaluations.
Klee also described the impact the company’s recent rebranding had on the process. To truly change perception and reflect GE’s new ‘digital industrial’ moniker, Klee explained that it became clear that a physical move would have the greatest effect on workplace culture. They wanted not only a location that would foster talent recruitment, but also a site that embodied the convergence of old and new, to reflect the new direction of the company. Klee recalled seeing the chosen site for the first time, and how the combination of the existing brick-and-beam warehouses with space for new construction was immediately appealing to her team. With a site chosen, GE is now working with an ambitious timeline for permitting and construction. Klee noted that establishing good working relationships with city and state officials early in the process was pivotal.
I remember our team standing on the top floor of the Federal Reserve, watching people pour out of South Station over the Summer Street bridge. You could feel the energy in the Fort Point neighborhood. – Ann Klee
Next, Doug Gensler went into detail about the thought process behind the design of the site. He described the importance of creating flows that would connect the different functions, as well as building a ground-floor destination for the neighborhood. The campus aims to foster collaboration and innovation throughout the community.
The program concluded with a question and answer period with the audience. CBRE/NE was honored to host such an informative and engaging event, but more importantly we are honored to have had the opportunity to work with the GE team.