Boston Market Overview

Transcription

1 Boston Market Overview

2 Boston Office Submarket Map Q3 Q3 Statistics Statistics North Station Market Size: 2.8 MSF Vacancy: 12.0% YTD Absorption: 76K Avg. Class A: $33.00 Overall Market Size: 67.3 MSF Vacancy: 11.7% YTD Absorption: 1,736K Avg. Class A: $43.30 Financial District Market Size: 33.8 MSF Vacancy: 11.2% YTD Absorption: 896K Avg. Class A: $43.74 South Station Back Bay Market Size: 12.6 MSF Vacancy: 10.1% YTD Absorption: 364K Avg. Class A: $44.30 Market Size: 1.5 MSF Vacancy: 12.3% YTD Absorption: 8K Avg. Class B: $21.86 Seaport District Market Size: 4.9 MSF Vacancy: 15.3% YTD Absorption: 271K Avg. Class A: $29.50

3 Where Is the Class A Market?

4 Tale of Two Cities Average Rent $70 Market Driver Small Tenant $65 $60 ABN-AMRO One International Pl. Spectrum Equity One International Pl. CC Growth One International Pl. J.M. Connors Jr. 200 Clarendon Street Martingale Asset Mgmt. 222 Berkeley Street $55 $50 UBS 1 Post Office Square Bingham McCutchen 1 Federal Street $45 Lahive & Cockfield 1 Post Office Square $40 $35 Shepherd Kaplan LLC 125 Summer Street Wellington Management 100 Federal Street DLA Piper 33 Arch Street Spaulding & Slye 1 Post Office Square $30 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06

5 Asking Rates on the Rise Building Name Floor Old Asking Q New Asking* % Increase 600 Atlantic Avenue 26 $36.00 $ % 101 Federal Street 20 $38.00 $ % Prudential Tower 33 $45.00 $ % 1 Post Office Square 37 $49.00 $ % Asking lease rate trends in selected premium view suites As of 9/28/06

6 Renew vs. Relocate Who Wins?

7 Where Are The Rents Going?

8 1,000, , ,672 1,449, , ,000 1,089, , ,143 1,024,000 1,023,309 1,600,000 1,400,000 1,200,000 1,000, , , , , Russia Wharf/Fan Pier (1) South Station Forecasting Future Rents Complete SF

9 1,000, ,000 1,600,000 1,400,000 1,200,000 1,000, , , , ,672 1,449, , ,000 1,089, , ,143 1,024,000 1,023, , Russia Wharf/Fan Pier (1) South Station Forecasting Future Rents Complete SF Fleet Scudder TRG Rental Rate 70% Foley Hoag & Nutter Holland & Knight Palmer & Dodge Average RR: $48.80 Average TI: $51.50 Average RR: $28.10 Average TI: $47.10 Rental Rate 40% $ % $ % $58.56

10 Where Is The Demand?

11 Large Tenants in the Market Months Prior to LED Company Address Commitment Date LED One Post Office Square 152,575 SF March 05 10/31/ Boylston Street 93,865 SF December 05 11/1/07 75 State Street 110,323 SF December 05 3/31/08 2 International Place 229,537 SF September 06 4/30/09

12 Financial Services Changing of the Guard Negative Absorption Positive Absorption 150,000 SF Expanding Outside of Boston 100,000 SF 150,000 SF Uncertain Futures, For Sale 140,000 SF

13 Law Firms

14 Who Will Be the First to Develop?

15 New Construction Permitted Sites Russia Wharf Russia Wharf Equity Office 500,000 SF of Office Space 31,000 SF Retail/ Restaurants Occupancy 2010 South Station Hines/Tufts 960,000 SF 680 Ft Tower 41 Stories Occupancy 2010 South Station

16 New Construction Permitted Sites Fallon Development Fan Pier Fallon/Mass Mutual 2.9 MSF 1.2 MSF Office Building 18 Stories Occupancy 2009 Boston Properties 888 Boylston Boston Properties 258,000 SF 31,000 Retail Space 11 Stories Occupancy 2010

17 New Construction Non-Permitted Sites Morgan Stanley Development Filene s at Downtown Crossing Congress/Purchase Street 133 Federal Street

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19 Suburban Market Overview

20 Suburban Office Market Inventory 2006 Q3 Total Suburban Market: 80M s.f. 495/NORTH 10.5 M s.f. 29.7% Available 495/MASS PIKE 12.9 M s.f. 22.7% Available NORTHWEST 12.6 M s.f. 24.2% Available 128/MASS PIKE 18.8 M s.f. 13.7% Available NORTH 11.3 M s.f. 18.6% Available BOSTON 58.2 M s.f. 13.9% Available. CAMBRIDGE 15.9 M s.f. 11.4% Available 495/SOUTH 2.2 M s.f. 21.6% Available SOUTH 11.5 M s.f. 19.7% Available

21 Availability/Rents by Quarter ( ) Rent Bar = Average Class A (at Top) Average Class B (at Bottom) Boston Cambridge Suburbs 128/Mass Pike $60.00 $55.00 $50.00 $45.00 $40.00 $35.00 $30.00 $25.00 $20.00 $ % 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% $ YTD YTD YTD YTD Rents (Top = A / Bottom = B ) % Available 0.0%

22 Path of Improvement in the Suburbs Class A Office 2006 Q3 Avail High 42.0% Current Avail 34.3% Rent Low $12.00 psf Current Rent $17.00 psf Avail High 40.9% Current Avail 32.1% Rent Low $16.84 psf Current Rent $23.00 psf Avail High 42.5% Current Avail 21.6% Rent Low $20.36 psf Current Rent $32.00 psf BURLINGTON LITTLETON CONCORD Avail High 39.2% Current Avail 23.4% Rent Low $20.02 psf Current Rent $31.00 psf Avail High 18.7% Current Avail 7.9% Rent Low $19.00 psf Current Rent $26.00 psf LEXINGTON WALTHAM Avail High 26.6% Current Avail 11.3% Rent Low $25.00 psf Current Rent $38.00 psf CAMBRIDGE Avail High 32.5% Current Avail 12.2% BOSTON MARLBOROUGH/ WESTBOROUGH FRAMINGHAM Rent Low $24.00 psf Current Rent $40.00 psf Avail High 20.8% Current Avail 12.6% Rent Low $40.00 psf Current Rent $60.00 psf Avail High 46.7% Current Avail 32.4% Rent Low $17.00 psf Current Rent $24.00 psf

23 Suburban Active Requirements By Target Market As Of 10/10/06 South 11% (23) North 9% (17) Northeast 3% (4) 495/North 20% (45) 495/South 12% (15) 495/Mass Pike 17% (35) 128/Mass Pike 12% (94) Northwest 16% (51) Required Square Feet: 9,907,850 s.f. Average Requirement Size: 34,887 s.f. Median Requirement Size: 15,000 s.f. Number of Requirements: 284

24 Suburban Active Requirements By Type As Of 10/12/06 New to Market 2% (18) Looking to Buy 2% (4) Additional Space 9% (21) Relocation w/contraction 12% (24) Relocation 56% (163) Relocation w/ Additional Space 19% (54) Required Square Feet: 9,907,850 s.f. Average Requirement Size: 34,887 s.f. Median Requirement Size: 15,000 s.f. Number of Requirements: 284

25 128 Mass Pike Proposed Developments How many projects are in the pipe line in Waltham today?

26 13 Proposed Developments 1 2 Lexington Technology Park 125 Spring Street, Patriot Way, Lexington Owner: Patriot Partners Proposed Square Feet: 631,600 Reservoir Woods Winter Street, Waltham Owner: Davis Marcus Partners Proposed Square Feet: 650, Wyman Street, Waltham Owner: Equity Office Properties Proposed Square Feet: 400,000 Waltham Office Center 470,486,504 Totten Pond Road, Waltham Owner: Boston Properties Proposed Square Feet Third Avenue, Waltham Owner: Boston Properties Proposed Square Feet: 230, Fourth Avenue, Waltham Owner: Boston Properties Proposed Square Feet: 204,000 Overlook Center 21 Hickory Drive, Waltham Owner: Neelon Properties Proposed Square Feet: 110, Polaroid, Waltham Owner: Related Companies Land Proposed Square Feet: 1.5 million Area: 106 Acres 201 Jones Road, Waltham Owner: Boston Properties Proposed Square Feet: 150, Boston Post Road, Weston Owner: Boston Properties Proposed Square Feet: 359, Green Street, Waltham Owner: Opus Development/Sam Park Proposed Square Feet: 524, Trapelo Road, Waltham Owner: Bulfinch Co. Proposed Square Feet: 61, Sylvan Road, Waltham Owner: Davis Marcus Partners Proposed Square Feet: 400,000 10

27 Suburban Market Trends Migration to secondary markets Class A rates are climbing Class B will benefit Large blocks virtually gone Lack of plug & play Average size requirement is growing Sublease space No longer a factor Speculative development has begun