New developments in both commercial and residential real estate have been materializing rapidly in Boston. Despite these new developments, however, space is limited in Boston and the last five years have seen a cycle of corporate tenants moving spaces, especially to the Seaport and Kendall Square areas.
“2015 was a record-setting year for building trades and deal volume – with $5 billion trading hands,” said Steve Woodworth, Senior Managing Director of Savills Studley. He estimated that in the year ahead we could see a marginal shift in availability rates, moving to a slightly lower availability percentage.
Driving the commercial real estate sector in Boston has been and is projected to continue to be the high-tech, healthcare and education industries. According the Bureau of Labor Statistics, the high-tech sector has paid nearly 20% of all wages in Massachusetts in the last 10 years. Tenants such as these are requiring additional space as they continue to overflow their current office spaces.
Another interesting trend Woodworth noted, was that more and more businesses were retreating from their original open floor plans. As the need for privacy and confidentiality in these prominent sectors has increased, these open concept models are not as conducive to facilitating that, calling a need for 80/20 percent of private space.
The last three years have shown double-digit rent growth year over year. The effects this will have on the north and south suburban markets are yet to be seen.
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