Suburban Boston’s Office Space Market Continues to Thrive
As lease prices reach and remain at historic highs across much of Boston and Cambridge, and vacancy rates remain at or near historic lows, businesses of all sizes and scopes are starting to look beyond the city proper and into the suburbs for growth opportunities and rent relief. As a result, Boston’s suburban office space market has continued to thrive as a whole over the last year, and that trend is likely to continue, or even to intensify, in the months and years to come. Read on to learn more about the office real estate market in Boston’s suburbs below.
Average rent for space for offices in the Greater Boston suburbs at the end of the third quarter of 2019 stood at $26.05 per square foot. Many submarkets in the suburbs experienced even higher rent growth, however. For example, Metro North as a whole saw a lot of growth, but the Route 128 North submarket experienced exceptional growth – especially in terms of rent prices. Indeed, the average price per square foot to lease space suitable for an office is now around $29.87 per square foot, which would have been unimaginable just a few years ago.
Communities in Metro South also experienced a very strong third quarter of 2019, with vacancies and availability shrinking for commercial real estate space – especially for offices. Although the average price per square foot for the region as a whole was around $25.74, the Route 128 submarket has experienced exceptional growth and demand. In fact, it is the most active submarket in the Boston suburbs, and office rents there now average $27.26 per square foot. One of the biggest deals to occur in that market of late was the leasing of all 96,000 square feet of space at 100 Station Drive in Westwood by Citizens Financial Group Inc.
Things were a bit quieter in Metro West’s Route 495 West submarket, although Framingham and Natick saw upticks in activity. The average rent there at the end of the third quarter of 2019 was around $26.19 per square foot. Among some of the larger deals that occurred was the leasing by Lytx, Inc., of 20,000 square feet of space at 492 Old Connecticut Path in Framingham.
Given that the third quarter of 2019 was the second most active one since the fourth quarter of 2015, it comes as no surprise that new construction abounds across the suburbs and its many submarkets. Indeed, around 2.7 million square feet of office and lab space was in development, and that should provide some relief for companies that are seeking greener pastures in the suburbs. However, many firms continue to hold off on relocating to the suburbs due to concerns about transportation. Top talent in the region tends to be concentrated in the urban core, and expecting those professionals to move out to the suburbs isn’t very realistic in many cases.
Still, areas like Metro West, which offer many vast office parks and huge blocks of space that are suitable for company headquarters and the like, should continue to see strong growth in the office real estate market. At $27.55 per square foot, Metro West currently has the most expensive going rate for this type of space. Its Route 128 West submarket is the top life sciences market outside of Boston and Cambridge, and space there is renting for a whopping $37.41 per square foot.
If you are looking for space for an office in the Boston suburbs, you face an uphill battle due to limited availability and sticker shock. Do yourself a favor and connect with Boston City Properties. We’ll give you free access to our vast online database of searchable MA real estate listings, and we can connect you with an experienced commercial real estate agent in the community of your choice for further assistance. For more information, contact us today.