East Cambridge boasted the highest office rents among six submarkets, at $78.35 average per square foot. The Financial District the highest availability rate, with 25 percent.
Boston Realty Advisors last week announced numbers for the Class A office leasing market, saying the market experienced a significant increase in availability among all six submarkets: North Station, Financial District, Back Bay, Seaport District, East Cambridge, and Mid-Cambridge. “New construction outperformed the existing inventory,“ the report said, with “pre-leasing or by securing larger tenants seeking flight to quality.“
“Acquisitions of existing Class A buildings for lab conversion was the biggest story of 2021,“ the report said. Boston Realty Advisors predicted that lab conversions will continue to impact the market, displacing office tenants and removing existing inventory.
“High construction costs and labor shortages are expected to persist in 2022,“ the report said, keeping deal concessions and tenant improvement allowance higher to entice tenants to relocate.
The Class A office report said average rents were $74.75, down almost $3 since 2019. Availability, including sublease space, was 12.9 percent, up 1.5 percent over 2020.
Healthier East Cambridge had the highest average per square foot rents, at $93.17, with only 5.6 percent availability.
The Financial District’s availability, on the other hand, zoomed to 20.9 percent, a direct result of the pandemic.
Demand continued to be hindered by the pandemic in Class A buildings, the report said, but “an uptick in Q3/A4 leasing activity has provided momentum headed into 2022.”
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