Vacancies keep heading lower in Cambridge. Thanks to the delivery of the fully leased 100 Binney Street, East Cambridge had 418,000 SF of absorption. However, aside from that pop, absorption was slightly negative there. Alewife bounced back, with more than 100,000 SF of absorption, all in office space. Tenant demand is staying white-hot, with vacancies highly contested. Meanwhile, tenants demanding to remain in Kendall, in particular, may be forced to seek alternatives elsewhere. There just isn’t enough space to go around.
The Boston suburbs are poised for growth. Absorption continues, and vacancies are down 0.8 percentage points over the past year. The Route 495 North market has led the way with 450,000 SF of absorption in Q2. Overall, occupancy has never been higher in the suburbs, and plans are emerging for a wave of development in the Inner Suburbs that would transform the submarket. Lab remains a focal point of tenants and investors, who are actively seeking alternatives to Cambridge.