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.

Marks Photo1

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


Despite large givebacks, demand remains steady in the suburban office market


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

BostonSuburbanImageQ3The Suburban Office market experienced a slow Q3 2017, recording 685,640 sq. ft. of negative absorption. A number of large blocks of space were returned throughout the market, primarily driven by relocations and added sublease space in the Route 128 West submarket. Fundamentals remain healthy despite these new vacancies, as demand remains steady and there are several large active requirements throughout the market.

Overall, availability and vacancy increased 30 basis points (bps) and 20 bps quarter-over-quarter to 21.3% and 19.0%, respectively, a direct result of the considerable added inventory.


The West carries the market as the suburbs get off to an uneven start

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


Reebok’s headquarters relocation to downtown Boston in Q3 2017 will result in another large block of space becoming available in the Metro South market.

To begin the year, the Greater Boston Suburban Office market recorded 320,388 sq. ft. of positive absorption, as considerable activity in the Metro West bolstered the market, much of which was holdover from slow-moving deals in 2016.

Life sciences continued to drive demand, and as tenants began to shift outwards from tighter urban markets, buildings with strong amenities experienced the most success, as the push for quality office space continued to rise.

Availability dropped 20 basis points (bps) quarter-over-quarter to 20.5% as large tenant renewals and organic growth from established companies continued to be a theme.

Despite the decline in availability, vacancy increased 50 bps, quarter-over-quarter, to 18.1%, while rents remained relatively flat, ending Q1 2017 at $22.78 per sq. ft.


Recap: 2017 CBRE/New England Boston Market Overview – Part 2

In this next installment of our Boston Market Overview recap series, we look to our Suburban market experts. Alison Powers, First Vice President, and Andy Majewksi, Executive Vice President/Partner, have been following suburban migration for some time now. But why is this happening? What are the numbers behind these trends? Their draft picks tell all…


Draft Pick #1: Alison’s 2016 MVP = Life Sciences


“In 2016, over 1.3 million square feet was leased to the life sciences sector in the suburbs outside of Boston and Cambridge. That’s a 35% increase in life sciences leasing activity from 2015 resulting in one million square feet of positive absorption in the suburbs.” – APCBRE_2017MARKETOVERVIEW_2-65.jpg

Draft Pick #2: Andy’s 2016 MVP = Industrial

“Despite negative absorption on the office front, the industrial market experienced over 550,000 SF of positive absorption, which marks a 10-year high for the Greater Boston Industrial market. This is why my MVP pick is industrial. Where else on Route 128 can you find a vacancy rate of 6% and 18% rent growth? So what’s causing this upswing? It’s really a function of industrial migration in and migration out.” – AM


CBRE_2017MARKETOVERVIEW_2-74.jpgDraft Pick #3: Andy’s 2017 Player to Watch = New Construction

“What do Beverly, Waltham, Watertown, Lexington and Newton have in common? New construction and, in some cases, major renovation—there are currently 10 projects across these five times in the works, demonstrating that there are no boundaries to new construction in the suburbs. ” – AM


Draft Pick #4: Alison’s 2017 Player to Watch = Organic Growth

“There is continued migration outward from Cambridge and Boston of life sciences and even non-life sciences companies that need to accommodate expansion.” – AP

Draft Pick #5: Andy’s Flex Pick = Millennials Aging

“In 2017 the largest cohort of millennials will turn 26. That’s important because it’s the same age that young people start to get more serious about their careers, housing and their future.” – AM


Draft Pick #6: Alison’s Flex Pick = Generation Z

“Generation Z is 25% of the current population. The oldest members of Generation Z are turning 21 years old next year and will be entering the workforce before you know it. Generation Z is comprised of 60 million people strong—outnumbering millennials by nearly one million—and they are going to boost the suburbs.” – AP


Stay tuned for our next post, where we will reveal the draft picks chosen by our Capital Markets team at this year’s Boston Market Overview.

Did you miss our first installment of the BMO recap series? Catch up here.