The suburban market led Greater Boston on the absorption front this quarter, gaining 800,000 SF. Much of this was driven by sublease space decreasing by 550,000 SF to the lowest absolute levels since the first quarter of 2001. There were no major space givebacks this quarter on the scale of those of Bose or Reebok that started the year, which helped contribute to the strong quarter. Nearly every submarket posted positive absorption in the third quarter.
Demand Downtown was strong this quarter, even if the statistics do not reflect it all. Leases from PTC and Alexion at 121 Seaport Boulevard and Duck Creek Technologies and Industrious at 22 Boston Wharf Road show activity, but not absorption, as the buildings have yet to deliver. Commitments but not-yet-signed deals from Bose, Rapid7, WeWork, and others suggest optimism going into year-end. Overall, vacancies ticked up slightly in the third quarter to 10.9%, from 10.8% the quarter before.
The Cambridge market has dug itself out of the hole it began the year in, with another quarter of healthy absorption. Thanks to a big deal from Shire at Ariad’s former headquarters at 125 Binney Street, Harvard taking 784 Memorial Drive, Celgene expanding at 200 CambridgePark Drive, and Morning Bright Investment opening an incubator in the former Cambridge College space at 1000 Massachusetts Avenue, the market topped 350,000 SF of absorption.
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.