While Boston has seen a surge in demand for Class B brick and beam product, there’s still nothing like the prestige of being in a premium office building – even if it comes with a sky-high cost. This year, the average price tag for space across North America’s Skyline buildings is $44.55 per square foot – an all-time high.
In Boston, one of the top five most expensive skylines according to JLL’s latest Skyline report, no new Skyline construction is on the horizon. That lack of supply likely paves the way for landlords to continue moderately raising asking rents. The direct average asking rent this year is $63.06 per square foot, compared to $60.99 in 2016.
Tenants are overwhelmingly basing their location decisions on access to talent, so the vibrant Seaport and transportation-rich Downtown submarkets are in strong demand. In just the past year, a number of large corporate tenants including Boston Consulting Group, PwC and Goodwin Proctor have all left or will soon be leaving the Downtown area for new construction in the Seaport. This has left Downtown towers racing to modernize and update their product.
“Landlords are investing significant capital into making traditional Class A space more vibrant, as they try to differentiate and keep up with tenant demand,” said JLL Managing Director Ben Heller. “We are even seeing landlords convert rentable space for amenities, such as at 100 Summer Street and 100 High Street.”