A few times a week I’m asked “How’s the real estate market?” I try to keep my answer short, but inevitably there is no quick answer.
How is it for tenants or landlords? What product type: office space, laboratory, manufacturing, or industrial? In Boston, along 128, 495, nationally or globally?
There is a different answer for all of these questions and in some cases a dramatic one. The Back Bay has a vacancy rate of 4.3% and downtown absorption stands at 1.1M in 2011. East Cambridge has seen similar demand with rising rental rates. Along the Route 2 area of Lexington, vacancy is at 11%, while just two exits north along Hartwell Ave in Lexington it soars to 55%. Vacancy along 495 is more than 20%. Demand along Route 128 has picked up and vacancy is down to approximately 14.5%.
Then there are some pockets of space that just seem to have been vacant forever. There is a stretch of five buildings in the northern suburbs within 300 yards of each other that have been listed for 55 to 85 months. There are varying reasons why these spaces have been vacant for so long ranging from access, ceiling heights, functionality, and a lack of amenities. On the other hand the Class A office complex at Corporate Drive in Burlington has recently leased 150,000 SF within the last few months to a number of different tenants and they are increasing their asking rents.
The next time I’m asked the $64 Thousand Dollar Question “How’s the real estate market?” I think I’ll simply respond “It’s good. Thanks for asking.”