Wednesday Mar 20, 2013 by Ashley Lane - Director of Research, Cassidy Turley
If you are a tenant in the market for office space in Boston this year, you may want to consider the findings of Cassidy Turley’s research team. Our analysis of Boston’s 2012 deals pinpoints trends and changes in a city that is beginning to rival Cambridge’s Kendall Square as a hub for start-ups and tech firms.
The city has historically been home to the region’s most traditional (Finance/Insurance/Real Estate and Business Services) organizations so it’s no surprise that nearly half of the deals executed in Boston last year were with tenants in the FIRE industries. What may be surprising is the rapidly growing popularity of downtown Boston among start-ups and technology entrepreneurs as an alternative to Kendall Square – 44% of the deals signed in the Seaport District were with technology-based firms. Diminishing availability in the Seaport District has pushed rental rates in the young neighborhood to levels comparable to established markets such as Back Bay.
What hasn’t changed (yet) is low rise (floors 1-12) space in the Financial District as a value play – where rents were, on average, 18% lower than those in mid-rise space (floors 13-22). While certain landlords consistently achieved above-market rents, others have loosened credit standards and are becoming more start-up friendly. Keep in mind that demand from growing technology firms is increasing, and rent premiums are expected to climb in the next two quarters.
We hope you will find the following analysis helpful as you navigate the city.
To see a larger version of the infographic, please click here or on the image below.