The Boston market posted nearly 700,000 SF of absorption on the year, lowering vacancies to 10.5%. Fourth quarter absorption was 102,000 SF, but even that belies the strength in the market overall. Bose signed on to the recently completed 80 Guest Street, while Rapid7 and Mass Innovation Labs agreed to lease space in under-construction assets, for a combined total from all three of 329,000 SF. Add in the deals from Alexion and PTC at 121 Seaport Blvd., and the case for strong absorption in 2018 is clear.
The Cambridge market finished the year on a high note, as another 70,000 SF of absorption in the fourth quarter sent vacancies down to 4.5%. On the year, more than 400,000 SF of space was absorbed in Cambridge, topping absorption in the Suburban market, which is over five times larger by inventory. Cambridge’s absorption took place entirely in the lab market, as office space posted 189,000 SF of negative absorption on the year, while the lab market pushed 600,000 SF of gains.
As we look to 2018, there are a number of positive signs in the suburbs. The Reebok campus is under agreement and could be redeveloped into a prime suburban home for tenants, and Astellas Institute is converting 9 Technology in Westborough into an R&D facility, filling in the space put on the sublease market by Bose earlier in the year. And the suburbs at the end of 2017 have the highest occupancy ever recorded, 100 million SF. Much has been made of the urban migration trend, and while that is certainly occurring, the suburbs in Greater Boston are alive and well.
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.