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.