Greater Boston Industrial sees tempered demand in Q3, rents continue to rise

Industrial

Short on time? Here are the highlights of our third quarter 2018 Boston Industrial MarketView. To request the full report, fill out the form at the bottom of this post.

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360 Second Avenue, Waltham

The lack of large transactions in Q3 2018 and tempered demand led the Greater Boston area to a relatively flat quarter statistically, bringing the year-to-date total to just over 720,000 sq. ft. of positive absorption. Overall availability and vacancy ended the quarter declining to 9.1% and 6.1%, respectively, with average asking rents increasing to $9.76 per sq. ft. largely driven by the inner core markets. In a market that has been historically tight, the 2.0 million sq. ft. of new construction currently underway has become a welcome relief valve for dwindling options despite the continued rise in construction costs.

Investment activity this summer was strong in all submarkets, which is an indicator that the market continues to garner continued interest from various capital sources. The outlook on the overall economy remains positive.

A strong start to the second half of 2018

Suburban.PNGShort on time? Here are the highlights of our third quarter 2018 Boston Suburban Office MarketView. To request the full report, fill out the form at the bottom of this post.

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9-11 Hampshire Street, Mansfield

The Greater Boston Suburban Office market experienced a strong Q3 2018 as 912,000 sq. ft. of space was absorbed in each of the three metros contributing over 100,000 sq. ft. of positive absorption. The Metro North bolstered the overall market as several sizable technology firms signed deals in the Route 3 North submarket. The Metro South experienced its healthiest quarter of the year as both the Route 128 South and Route 495 South submarkets saw strong interest from tenants and life science firms, which continued to drive demand in the Metro West. With more than 6.4 million sq. ft. of active occupier demand in the Suburban market, more than 37% of the requirements are from the tech sector and 20% from life science firms.

Co-working and shared office space operators are beginning to surge into the suburbs. While some of the largest national operators have not yet ventured into the suburbs like they have downtown, a number of smaller, independent operators have begun to open locations throughout the suburban landscape and will certainly be a trend to watch in the coming quarters.

Overall, the Suburban market availability fell 50 basis points (bps) quarter-over-quarter to 21.2%, and rents increased to $23.82 per sq. ft. gross.

Property Spotlight: 225 Carando Drive

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Built in 1991, CBRE/New England is pleased to offer 225 Carando Drive, a ±46,148 SF building in Springfield’s Industrial A zone, for lease or for sale at $3.5 million. Previously occupied by a printed circuit board assembler, the building is suitable for high-tech assembly, manufacturing and indoor agriculture. The building is fully air-conditioned, serviced with heavy-duty power, offers parking for 100 cars and additional land.

The property is located within Carando Industrial Park, just one mile from Interstate 291 and three miles from Interstates 90 (Massachusetts Turnpike) and 91.

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The building includes 25′ x 50′ column spacing, three loading docks and a clear height of 17-20′. Zoned I-2, 225 Carando Drive also offers two cafeterias and a training room.

Utilities

For additional information, please contact CBRE/NE’s John Reed.

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Property Spotlight: Union Point

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In the age of seeking that perfect live-work-play environment, Union Point has gone where no other New England development has before. Below are Union Point’s seven differentiators:

1. Fast Track Permitting: Union Point expands across three Massachusetts towns: Weymouth, Rockland and Abington. Potentially, development could have been a headache for those wanting to build their own facility. However, SouthField Redevelopment Authority (SRA) was established within the three host communities to serve as the one-stop shop for all land-use and development decisions. This seamless approval process takes only 65 days.
Fast Track Permiting Photo
Fields.PNG2. Sports Complex:
Union Point offers a brand-new, 25-acre outdoor and indoor sports complex, which features four lighted turf fields for soccer, lacrosse, rugby and field hockey. Two of the four fields can be covered with air-supported structures for year-round use. In addition to the turf fields, the complex will house a miniature replica of Fenway Park, gymnasium, outdoor basketball courts and street hockey rink. All sports facilities are accessible for Union Point residents and surrounding communities. In addition to sports leagues run by Union Point, Global Premier Soccer, Laxachusetts and Boston Rugby Club also will utilize the space. The facility will also house a restaurant, which will be perfect for pre-game fuel and post-game celebrations.

3. Access to Boston: Union Point is an easy 20-minute drive (a mere 12 miles) to Boston. No car? No worries. Union Point also has its very own MBTA Commuter Rail Station providing access to South Station.
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Outdoor.PNG4. Urban Feel with Instant Outdoor Space:
With over 50 miles of hiking and biking trails located on the campus, residents, visitors and employees can easily step into the beautiful Massachusetts woodlands. The development also plans to have over 1,000 acres of open space surrounding and spaced within the dense urban city.

extraPic25. Focus on Smart Technology:
Since Union Point is being built from the ground up, the development is planning to incorporate smart technology into the energy, water, lighting and transportation systems. For example, the streetlights will have sensors that track sounds, light and other conditions. This may seem trivial, but the data could actually be used to monitor traffic, alert the police of suspicious activity and even help drivers find parking spots. Additionally, there will be reliable free wi-fi everywhere as well as heated sidewalks.

ExtraPic16. Thinking Globally & Acting Locally: The developers of Union Point want to stay true to the New England vernacular while incorporating global touches, too. For example, the well-curated retail mix will include a range of Boston-based brands and national retailers. Additionally, Union Point’s future implementation of rooftop farms will also help to enrich the local vibe. Down the road, partnerships with academic and cultural institutions will be developed to make academic programs readily accessible to the community, helping to bring a global perspective to the city.

7. Events:
From farmers markets to concerts to sporting events to food truck rallies, Union Point will be a vibrant 24/7 community. The Hangout, one of Union Point’s entertainment outlets, recently opened and has live music Friday-Sunday with a rotating group of retailers and food trucks.

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For more information, check out the Union Point website. For leasing inquiries, contact CBRE/New England’s Mike Ripp or Steve Clancy.

 

Continued life sciences demand gives the Suburban Office market a strong start to the year

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Short on time? Here are the highlights of our first quarter 2018 Suburban Office MarketView. To request the full report, fill out the form at the bottom of this post.

1 Patriots Park Rendering
1 Patriots Park Rendering 

To begin the year, the Greater Boston Suburban Office market recorded 169,634 sq. ft. of positive absorption, as considerable leasing activity in the Metro North and West bolstered the market. The Metro West continued to see significant interest from the life sciences sector, as tenants seek high-quality buildings with a cheaper alternative to comparable buildings in Boston and Cambridge. The Metro South experienced little activity, but large mixed-use redevelopment opportunities will be something to keep an eye on for the remainder of 2018. Overall, availability and vacancy decreased 40 basis points (bps) and 70 bps quarter-over-quarter, ending Q1 2018 at 21.1% and 18.2%, respectively.

 

CBRE/New England Research Highlighted at State House Day

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On Thursday, April 12, our Évianne Netherwood-Schwesig’s research on the 495/Metro West market was displayed at 495/MetroWest Partnership’s annual State House Day. The 495/Metro West market extends along the Interstate 495 corridor from Westford in the north to Foxborough in the south, and spreads east-west along Route 9 from Natick to Shrewsbury. While once primarily an industrial economy, the area today supports a broad spectrum of white-collar occupiers, including a growing cohort of tech and life science companies.
Map of 495 metroWest
A high-level overview of Évianne’s findings is below:

  • Although 2018 began in the red, absorption was positive in three of the four preceding quarters. Continued healthy tenant demand indicates that the market is on solid footing.

Absorbtion

  • Vacancy has declined steadily over the last three quarters, as increasing numbers of tenants look for affordable alternatives outside the Boston urban core.

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  • 495/Metro West rents have seen modest growth in recent years, as is to be expected as the market gains attention. However, rents remain at a dramatically better value than in the Boston urban core, where rapid growth has driven the rental gap even wider.

Class A

  • Specific 495/Metro West company statistics can be found below:

End Charts

To read more about Évianne’s findings, click here.

CBRE/New England Wins Big at the CBA Achievement Awards!

By Taidgh McClory, Managing Director/Partner, Advisory & Transaction Services

On March 22 at the InterContinental in Boston, the Commercial Brokers Association (CBA) gathered to honor select brokerage teams throughout Greater Boston at their annual awards dinner. For the brokerage industry, this is equivalent to the Academy Awards. CBRE/New England stood out as a dominant force at the awards, taking home six out of a potential 13 awards.

On behalf of the entire company, congratulations to all this year’s winners, nominees, our clients and the finalists! We continue to be proud of our employees, our collaboration and our market leadership as a world-class company.

Below are the CBRE/NE finalists for 2017’s CBA Achievement Awards:

MemorialDrive_1Office Deal of the Year – Greater Cambridge
InterSystems
Size: 238,000 SF
Address: One Memorial Drive, Cambridge, MA
Landlord: Oxford Properties
CBRE/NE Representatives: (Landlord team – Steve Purpura, Eric Smith) (Tenant team – Adam Brinch, David Fitzgerald, Robert Fitzgerald, Tim Howe)

Retail Deal of the Year Trillium
Trillium Brewing Co.
Size: 16,000 SF
Address: Thompson Place, 47 Farnsworth Street, Boston, MA
Landlord: Invesco/CrossPoint
CBRE/NE Representative: Brian Cohen

BrattleCourt_aerial_700px_v2Most Creative Deal of the Year
Brattle Court at Harvard Square
Size: 61,858 SF
Address: 1-8 Brattle Street, 17-41 Brattle Street, Cambridge, MA
Landlord: Asana Partners
CBRE/NE Representatives: Dave Pergola Jr., Brian Doherty, Matt Curtin

Life Science Deal of the Year75.125 Extrior Updated 06.2014
Shire
Size: 222,926 SF
Address: 125 Binney Street, Cambridge, MA
Landlord: Sublease – Shire
CBRE/NE Representatives: Steve Purpura, Eric Smith, Brian Cohen

President’s Council Special Recognition
Dynatrace (Five-Party Waltham Mega Deal)

  • National Grid subleased 68,000 SF from Dynatrace at FM Global’s (landlord) 404 Wyman Street in Waltham, MA
  • Dynatrace, represented by CBRE/NE, relocated to 40,000 SF at Boston Properties’ (landlord) Reservoir Place at 1601 Trapelo Road in Waltham, MA
  • Dynatrace’s move to Reservoir Place required JLL to help another client, Constant Contact, restructure its existing lease
  • CBRE/NE Representatives: Ron Friedman, Perry Beal

Industrial Deal of the YearIndustrial Deal of the Year
66 Saratoga Boulevard, Devens, MA
Size: 275,392 SF
Landlord: CIP Saratoga Boulevard LLC
CBRE/NE Representatives: Bob Gibson, Steve Clancy, Rachel Marks, Doug Rodenstein

To learn more about the night, please read more here.

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