JLL’s Cambridge Skyline Review is a floor-by-floor analysis of the premier office and lab properties in the Cambridge market. The Cambridge skyline is shaped by 28 office buildings and 29 lab buildings across three distinctive Cambridge submarkets. For this Winter Skyline just released, Cambridge continues to shine as one the nation’s leading commercial real estate markets. With proximity to premier talent and a growing amenity base, Cambridge is a dynamic market where multiple tenants compete for limited availability at increasingly high rental rates.
The Cambridge office market is driven by tenants striving to create, maintain or grow their presence in this market, despite the premium cost. Strong leasing activity from the technology sector contributed to over 412,000 square feet of absorption in the Skyline market during the last six months – helping overall vacancy to drop 200 basis points to 6.6 percent. There is only one contiguous block of space over 50,000 square feet in the entire Skyline office market; not nearly enough to satisfy current tenant demand. The average asking rent in the Cambridge Skyline office market is $58.51 per square foot Gross, up 9.2 percent over the last six months and 26.6 percent since last Fall’s Skyline. As a sign of overall market strength, investment activity has increased with notable property sales at both ends of the Cambridge Skyline.
The Cambridge lab market is home to some of the world’s leading biotechnology and pharmaceutical companies. Leading life science companies are clustered throughout Cambridge and continue to arrive here in droves. Big pharma continues to drive leasing and development activity in the region, but start-ups and midsize companies also play a key role in the Cambridge Skyline. Over the last six months, the Skyline lab market recorded 1,014,856 square feet of total absorption, representing a staggering 20.0 percent of stock. Overall vacancy declined 560 basis points to 6.5 percent, and the mid-Cambridge market achieved full occupancy. Average asking rents for lab space are $54.61 per square foot NNN, up 2.3 percent since last Spring’s edition. With few existing large blocks of space and significant active tenant requirements in the market today, rent growth will continue in 2015.
The Skyline Review is an in-depth and exclusive look at top-tier assets and their impact on the overall Cambridge market. To receive your own copy of JLL’s Winter Cambridge Skyline Review, please enter your information here.