495 WEST
495 NORTH
495 NORTHEAST
495 SOUTH
128 SOUTH
128 NORTHWEST
128 NORTH
FRAMINGHAM/NATICK
INNERSUBURBS
128 WEST
SOUTH OFFICE M
ARKETQ4
2016
ASKING RENT
LEASING ACTIVITY
12-MONTH ABSORPTION
SUBLEASE VACANCY
DIRECT VACANCY
STATISTICS OVER THE LAST 12 MONTHS
303 Congress Street | Boston, MA 02210 | 617.457.3400
www.NAIHunneman.com
Q4
303 Congress Street | Boston, MA 02210 | 617.457.3400
www.NAIHunneman.com
Q4 2016
Class A&B Rents
Submarket Trends
$10
$12
$14
$16
$18
$20
$22
2014 Q4 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4
Route 128 South Route 495 South
‐ The South markets have absorbed close to 600,000 square feet of office space since Q4 2015; allowing vacancies to end the fourth quarter 200 basis points below year‐ago levels.
‐ Tenant activity remains particularly strong in areas along Route 128, including Dedham and Westwood, as firms look for value, amenities and public transit access.
‐ The University of Phoenix is set to vacate 16,000 square feet at Adams Place by the end of the year, and the Travelers Indemnity put 40,000 square feet on the market at 44 Bedford Street in Middleboro.
‐ In one of the biggest announcements of the year, Reebok is planning a relocation to the Seaport. This move could result in roughly 500,000 square feet of office space hitting the Route 128 South submarket once the fate of the shoemaker's long‐time Canton headquarters is decided.
ArrowsDirect Vacancy Sublease Vacancy 12‐month Absorption Leasing ActivityAsking RentDown Up Flat Down Up
Seaport Total Inventory Under Construction Direct Vacant Sublease VacantRoute 128 Sout 14,356,268 0 1,504,929 57,426Route 495 Sout 3,224,505 0 403,088 17,301Total 17,580,773 0 1,908,017 74,727
Notable TransactionsTenant Address City SizeMott MacDonal101 Station Drive Westwood 24,259 Boston Children101 Station Drive Westwood 24,259 TriMark 603 West Street Mansfield 11,975 Highline United 980‐990 Washington SDedham 6,076 Mutual of Omah400 Crown Colony Dri Quincy 1,877 *Sublease
Featured Deal
Vacancy and Net Absorption
Campanelli in partnership with TriGate Capital of Dallas recently sold both buildings at Heritage Landing in separate transactions. An affiliate of FoxRock Properties purchased the 173,000‐square‐foot Heritage One for $31.6 million or $173 per square foot with plans to occupy the remaining space in the building. Grander Capital Partners acquired the 183,000‐square‐foot Heritage Two for $32.3 million or $175 per square foot.
0.0%
4.0%
8.0%
12.0%
16.0%
-200,000
-100,000
0
100,000
200,000
300,000
400,000
2014 Q4 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4
Net Absorption Vacancy
VACANCY AND NET ABSORPTIONCLASS A & B RENTS
TENANT ADDRESS CITY SIZE
Mott MacDonald 101 Station Drive Westwood 24,259
Boston Children's Hospital 101 Station Drive Westwood 24,259
TriMark 603 West Street Mansfield 11,975
Highline United* 980-990 Washington Street Dedham 6,076
Mutual of Omaha 400 Crown Colony Drive Quincy 1,877
*Sublease
NOTABLE TRANSACTIONS
TOTAL INVENTORY
(SF)
UNDER CONSTRUCTION
(SF)
DIRECT VACANT
(SF)
SUBLEASE VACANT
(SF)
TOTAL VACANCY
RATE
Q4 NET
ABSORPTION (SF)
YTD NET
ABSORPTION (SF)
ASKING RENT ($/SF)
Route 128 South 14,356,268 0 1,504,929 57,426 10.9% 170,364 249,692 $21.00
Route 495 South 3,224,505 0 403,088 17,301 13.0% 10,653 17,426 $18.79
TOTAL 17,580,773 0 1,908,017 74,727 11.3% 181,017 267,118 $20.53
FEATURED DEAL
356,000 SFHERITAGE LANDING, QUINCY Campanelli and TriGate Capital recently sold both buildings at Heritage Landing in separate transactions. An affiliate of FoxRock Properties purchased Heritage One for $31.6 million or $173 per square foot with plans to occupy the remaining space in the building. Grander Capital Partners acquired Heritage Two for $32.3 million or $175 per square foot.
STATISTICS
SOUTH OFFICE MARKET
SUBMARKET TRENDS
• The South markets have absorbed close to 600,000 square
feet of office space since Q4 2015; allowing vacancies to
end the fourth quarter 200 basis points below year-ago
levels.
• Tenant activity remains particularly strong in areas along
Route 128, including Dedham and Westwood, as firms look
for value, amenities and public transit access.
• The University of Phoenix is set to vacate 16,000 square
feet at Adams Place by the end of the year, and the
Travelers Indemnity put 40,000 square feet on the market
at 44 Bedford Street in Middleboro.
• In one of the biggest announcements of the year, Reebok
is planning a relocation to the Seaport. This move could
result in roughly 500,000 square feet of office space
hitting the Route 128 South submarket once the fate of the
shoemaker’s long-time Canton headquarters is decided.