From John Osten
Managing Director, Cambridge Brokerage
It’s no news that the demand for space in Cambridge has been tight for some time now, but the demand just keeps getting stronger. Considering Cambridge is home to one of the youngest, most educated workforces in the country – 41.3 percent of the population of Cambridge is between 20 and 34 years old – companies want to be near this talent. In the last eight years Kendall Square has transformed bringing in blue chips like Google and Microsoft, deepening the roots of big pharma presence from Pfizer and Biogen, along with the expansion of schools like MIT.
It is an amazing scene…unless, that is, you want to occupy space in Cambridge.
Now we are experiencing a 4:1 ratio on demand – meaning 4 times the requirements to actual available space on the market. There are 67 active requirements looking for over 3.6 million square feet. 28 percent of the companies are expanding and almost half of the demand is coming from the Life Sciences sector.
And here we are at the new normal. Cambridge continues to be one of the tightest submarkets in the U.S. Rents in all of Cambridge are $56 psf,up 13.0 percent year over year, and will increase significantly after Q2 stats are tallied.
Where will some relief come from? In the near future prognosis is not good. There are only four options with over 30,000 square feet and all of the new developments coming online in the next two years have been spoken for. Thankfully there are a few projects in the wings that will be looking for approval for permitting and expansion – so there is a glimmer of hope come 2018 and beyond.
For more information about the Cambridge market dynamics, please feel free to contact me to discuss further.