The tides may be turning in favor of Class A properties. While overall absorption in the Downtown market this quarter was positive, the Class A market was the driver, though Class B vacancies also fell, thanks to Amazon’s deal at 253 Summer. Vacancies ended the first quarter at 10.8%, down 0.1 percentage point from last quarter and up 0.3 percentage points from year-ago levels. The Financial District and Seaport led the market this quarter from a pure absorption standpoint, while most other submarkets posted marginal negative absorption.
The delivery of 50/60 Binney Street has helped to prop up demand in the Cambridge office and lab market. As the new home to Genzyme and bluebird bio, these properties delivered fully occupied. And Genzyme’s previous headquarters is being back-filled by Shire, which is making a big push back into the Cambridge market. Sublease space began to dwindle in the second quarter, vacancies fell to 6.7%, and rents continue to skyrocket. For the first time, the lab inventory is larger than the office inventory.
The suburban market posted mixed result in the second quarter, posting flat absorption. The Route 128 Mass Pike market led the way with more than 400,000 SF of absorption, while Route 495 North and West combined to give back more than 500,000 SF. Vacancies ticked up nominally, by 0.3 percentage points, to 18.6% as new product delivered. SharkNinja's headquarters, Linx in Watertown, and Wave Life Science’s new facility in Lexington combined to bring 500,000 SF of space to market.
Disclaimer: The data in this report reflects recent organizational changes to our historical time series. This report represents the Class A and B office and lab market. R&D properties are now divided into lab, which remains in this series, and flex, which will be found in the industrial series. Due to changing market dynamics, the Allston/ Brighton submarket was moved from the Inner Suburbs to its own submarket within the Boston framework, while Framingham and Natick are now part of the Route 495 West submarket. Please keep this in mind when comparing information in this report with previously published statistics. Historical comparisons will now reflect the new classifications and submarket boundaries.