2020 Q2 Market Viewpoint Report Boston Colliers

Download Report

The Boston market posted its worst absorption quarter on record, with negative 1.5 million SF seen in the second quarter. This drove vacancies up to 10.6%, a 2.0 percentage point increase from Q1. While very few transactions are taking place, renewals are one source of leasing. With uncertainty in much of the marketplace about construction timelines and current and future space needs, many tenants are being deliberate and methodical in decision-making. This tends to make a short-term renewal — especially when facing a pending lease expiration — a viable strategy. Sublease space is on the rise, increasing by nearly 900,000 SF since March 31, one of the largest quarterly increases ever tracked.

The Cambridge bioscience community has come together to battle the COVID-19 virus. There are 120-plus companies (and growing) with a Massachusetts presence working on the virus, and Cambridge-based Moderna will start one of the largest drug trials on record for its mRNA technology-based vaccine, a leading candidate. Meanwhile, the efforts put into research today will result in new therapies and discoveries for years to come. We are essentially speeding up our medical research, which should be good news for startups and demand in the Cambridge and broader life science marketplace.

Greater Boston’s suburbs have faced a massive slowdown in activity, similar to that of their urban counterparts. Deals are still getting done, for example in the 128 South market around Dedham Executive Park. Sublease space availability is not surging as it is in Boston; TripAdvisor’s 100,000 SF sublease at its Needham headquarters was the largest addition in the second quarter. The largest block of suburban vacancy, dubbed The Block (Reebok’s former headquarters), in Canton has a sale pending to Harvard Pilgrim/Tufts, in a property swap with Spear Street Capital for its Watertown operations. While this sale has not yet hit our stats, it would move the 128 South vacancy rate down about three percentage points. Overall suburban vacancies ticked down 0.1 percentage point in the second quarter to 15.9%. Office demand has been positive this year, but lab has been the story, accounting for nearly three-quarters of all absorption in 2020.

 

 

600x776  Cover_2020 Q2

btnDownload-red-212x75


2020 Q2 Market Viewpoint Report_250x196 News Card

2020 Q2 Market Viewpoint Report Boston Colliers

Download Report
Related Experts

Aaron Jodka

Managing Director, Research & Client Services

Boston

As the Managing Director, Research & Client Services, I oversee all aspects of our Client Service offerings, including Research, Marketing, Graphics, Financial Analysis, Lease Administration, and Client Service Coordination. I ensure that our brokers are providing superior service and deliverables to existing and potential clients. At the same time, I assist brokers with pitch preparation and delivery, while continuing to push the Colliers brand via best-in-class research reports, thought leadership, and contributions to numerous panels, media, and industry events throughout the city.

I collaborate with every team at our firm and wear many hats: in-house economist, advisor, consultant, thought leader, strategic business analyst, presenter, and, of course, researcher. My team and I manage the information and intelligence in our proprietary database, which, dating from the late 1980s, includes detailed property statistics on nearly 220 million SF of office space as well as on lab properties in the Greater Boston area. We also track more than 150 million SF of industrial properties in our market.

Communication is integral in my work. I write our quarterly Market Viewpoint series, internal submarket and lab reports, and Colliers In Focus thought pieces. I offer market insight as a monthly guest on Bloomberg Radio’s Baystate Business, and I’m a frequent resource for Bisnow, Banker & Tradesman, The Boston Globe, Boston Business Journal, The Real Reporter, and other publications.

Before joining Colliers, I spent 11 years with Property & Portfolio Research (PPR), now CoStar Portfolio Strategy. There, I advised institutional clients on their commercial real estate investment strategies across property sectors and also spoke at industry events, quarterly CoStar webinars, and in front of client audiences. I also led and directed a team of economists who monitored property markets across the United States. Near the end of my tenure, I helped establish a new business unit at CoStar, leading in the hiring, training, and coaching of a team of 50 market analysts. 

Outside of the office, I like to cheer on my children’s extracurricular activities. I also hike, travel, relax at home or at the lake, or plug away at one home project or another. Last but not least, I’m an avid fan of Boston sports teams.

View expert

Dion Sorrentino

Research Analyst

Boston

Dion Sorrentino joined Colliers International Boston as a Research Analyst in 2019. In this capacity, he contributes to the production of the firm’s quarterly Market Viewpoints, as well as managing the distribution of its weekly newsletter, Week in Review. In addition, he collaborates with brokerage and advisory teams on their client work and presentations.

Dion assists in managing the Colliers International Boston proprietary research database, which contains data on over 360 million square feet of commercial space in approximately 4,000 buildings in the Greater Boston area, encompassing Boston, Cambridge, and Suburban Boston and the insights it delivers. Dion also works with the rest of the research team to provide timely and reliable data that is critical to making effective and well-informed business decisions, including available space surveys and market trend analyses.

View expert

Nick Dessalines

Research Analyst

Boston

Mr. Dessalines joined Colliers International in 2020 where he is currently a Research Analyst. Mr. Dessalines’ responsibilities include analyzing and identifying market trends, working with brokerage teams on multiple client-related projects and initiatives, preparing quarterly market reports, and supporting the leasing and Capital Markets teams with various property and market level research.

Mr. Dessalines has worked in the real estate industry since his undergraduate days at Stonehill College. Prior to joining Colliers, Mr. Dessalines was a Brokerage Intern at CBRE in 2017 and then, upon graduation the following year, Mr. Dessalines joined JLL as a Data Analyst where he focused on tracking the Boston, Massachusetts and Hartford, Connecticut real estate markets.

View expert