G R E A T E R B O S T O N 2018 Q1 MARKET TRENDS FEATURED MARKETS 128 CENTRAL 495 WEST METROWEST 128 NORTH/RT 3 495 SOUTH WWW.RWHOLMES.COM
2018 Q1 Market Health Recap Deal Breakdown 128 Central Office 10.8% Vacancy Rate $31.00/SF Average Rate (gross) Class A & B space 445,457 SF Under Construction Coming to Market New Product 51 Sawyer Rd Waltham $47.4 Million Lease Lease Sale Noteworthy Transactions Under Construction 7 78 Sales Leases 0 2 4 6 8 10 12 14 16 Jan Feb Mar Vacancy Rate Sale Price per SF Vacancy Rates have stayed within half a percentage point from Q4 2017 Sale prices increased s$21/sf from Q4 2017 to Q1 2018 to an average of $252/sf. Properties that come available are quickly placed under agreement The square footage of projects currently under construction have already surpassed 2017 with several more proposed and awaiting a lead tenant 200 Smith St | Waltham 430,000 SF Class A Office Space The massive development called Post is filled with state of the art amenities 152 Grove St | Waltham 130,000 SF of Class A Office/R&D Space A mix of creative office and R&D space within an amenity-filled campus setting Q1 Transaction Breakdown (#) Q1 Lease Transactions by Size 900 Winter St Waltham Alkermes 220,000 SF 490 Arsenal St Watertown Kala Pharmaceuticals 66,000 SF
2018 Q1 Market Health Recap Deal Breakdown 495 West Office 21.1% Vacancy Rate $19.25/SF Average Rate (gross) Class A & B space 0 SF Under Construction On the Market Sales 100 Crowley Marlborough Allegro MicroSystems 50,000 SF Lease Lease Lease Noteworthy Transactions 5 32 Sales Leases 0 1 2 3 4 5 Jan Feb Mar Ferris Development Package Ferris Development decided to test the sales market by offering 4 of their office buildings, totaling 580,000 SF 293 Boston Post Road | Marlborough There have been numerous bidders for the first class, 178,700 SF office building, rumored to now be under agreement Q1 Transaction Breakdown (#) Q1 Lease Transactions 114 Turnpike Rd Westborough Liberty Mutual 24,000 SF renewal 132 Turnpike Rd Southborough Block Engineering 17,260 SF Sales Activity Though only two sales transactions were completed in Q1, several more transactions are expected to close in Q2 Vacancy Rates 495 West vacancy rates remain stable. Over the past five years the vacancy rates have decreased substantially Building Renovations In connection to the increased showing activity, owners are realizing the importance of updating tired lobbies and amenities to attract new tenants
2018 Q1 Market Health Recap Deal Breakdown MetroWest Office 13.1% Vacancy Rate $25.65/SF Average Rate (gross) Class A & B space 690,000 SF Under Construction Coming to Market New Product 33 New York Ave Framingham $9.26 Million Lease Sale Sale Noteworthy Transactions 0 1 2 3 4 Jan Feb Mar 1075 Worcester Rd 65,000 SF Office/R&D Building 20,000 SF available in Exponent’s state of the art office/lab facility 33 New York Ave 106,000 SF Office/R&D Building Renovation of old MetroWest Daily News HQ with focus on Life Science tenants Q1 Transaction Breakdown (#) Q1 Lease Transactions 1075 Worcester Rd Natick $4.75 Million 200 Crossing Blvd Framingham LTC Fast Pay 7,590 SF Vacancy Rates 2 15 Sales Leases Vacancy has increased due to relocations at 9/90 Corporate Center in Framingham. The park is 27% vacant with 331,000 SF available Rental Rates Area rental rates have stabilized at rates significantly lower than comparable properties minutes away along 128 Central, providing companies a value opportunity Startup Growth There has been an influx in small space requirements in the area caused by an increase in startup companies in the tech and biotech sectors
2018 Q1 Market Health Recap Deal Breakdown 128 North/Rt 3 Office 17.0% Vacancy Rate $21.90/SF Average Rate (gross) Class A & B space 365,000 SF Under Construction Coming to Market New Product and Renovations 150 Minuteman Rd Andover $32 Million Sale Lease Sale Noteworthy Transactions 7 85 Sales Leases 0 2 4 6 8 10 12 Jan Feb Mar 48-52 Dunham St | Beverly 145,000 SF of Class A Office Space Speculative 55 Cherry Hill Rd | Beverly 175,000 SF of Class A Office/R&D Space Owner/User: Krohne Inc. Q1 Transaction Breakdown Q1 Lease Transactions 55 Network Dr Burlington CA Technologies 80,000 SF 900 Chelmsford St Lowell $227 Million Vacancy Rates Vacancy rates in this market have steadily trended downward over the past 10 years, despite the addition of 3 million SF of new product Leasing Activity Leasing activity remains strong within the market. Of the four largest lease transactions, two brought tenants from outside the submarket Sales Price per SF For stabilized, Class A office sales, prices averaged around $210/sf. For vacant or add-value properties, the number drops significantly to $46/sf on average
2018 Q1 Market Health Recap Deal Breakdown 495 South Industrial 7.7% Vacancy Rate $7.35/SF Average Rate (NNN) Class A & B space 653,456 SF Under Construction Coming to Market New Product 165 Grove St Franklin $17.3 Million Lease Lease Sale Noteworthy Transactions 13 24 Sales Leases 0 1 2 3 4 Jan Feb Mar 351 Maple St | Bellingham 300,000 SF of Industrial Space One of two state of the art developments under construction in the business park 301 Bartlett St | Northborough 220,100 SF of Industrial Space Built on spec warehouse/distribution facility with 32’ clear height Q1 Transaction Breakdown Q1 Lease Transactions 27 Otis St Westborough Columbia Tech 88,000 SF 419 Maple St Bellingham Blue Linx 490,000 SF Rental Rates The industrial market continues to boom. There is not enough supply to meet demand, causing a continued upward trend in rental rates Under Construction The continued demand for flex and industrial space has pushed companies out of the core 128 market and into 495 west and south, causing an increase in spec and build to suit developments Months on Market The months a property is on the leasing market has decreased since 2015, with a majority of space being on the market for less than 6 months
RW Holmes: Q1 by the Numbers SAMPLE OF CLIENTS ADVISED IN Q1: 29 Lease Transactions Completed 4 Sales Transactions Completed 60% Repeat Clients 508.655.5626 321 COMMONWEALTH RD, SUITE 202 | WAYLAND, MA 01778 WWW.RWHOLMES.COM
Elizabeth Holmes Director of Corporate Services John Eysenbach Executive Vice President Mike Ogasapian Assistant Vice President Jim Bartholomew Assistant Vice President Craig Johnston Senior Vice President Dean Blackey Managing Director Garry Holmes President Paul McKeon Director of Finance Robert Strelke Vice President Arthur Amadei Senior Vice President Executive Team This report was created for you through the knowledge and insight of our executive team, who have a combined 245 years of industry experience. 508.655.5626 321 COMMONWEALTH RD, SUITE 202 | WAYLAND, MA 01778 WWW.RWHOLMES.COM [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected]