At the heart of the recovery is East Cambridge. Still, rents are 17% of high tech boom levels. It remains to be seen whether East Cambridge will achieve similar asking rents as 2001. Given today’s growth projections, however, we are likely to surpass 2008 rates in the near future.
What will continue to drive rents going forward?
• Few available blocks of space. Today the market is 7.4% vacant. There are only two blocks with over 100,000 square feet available.
• Costs of construction for anticipated development projects are driving the baseline for future asking rents. This in turn affects rents in existing Class A space.
• The Seaport District and low rise Class B Financial District space no longer present the same discounts to Cambridge.