CAMBRIDGE, MA– CBRE released its Cambridge Office and Lab MarketView for the first quarter of 2019, saying office rent in Cambridge decreased slightly to $80.04 per sq. ft.
“Although the excessive demand for space has finally begun to bleed into nearby markets, East Cambridge remains the epicenter of the life sciences industry,” said Évianne A. Netherwood- Schwesig, Senior Research Analyst for CBRE New England. “The bulk of the demand is coming from early- to mid-stage companies, while most of the big pharma requirements that had been in the market in the last couple years have now transacted.”
Cambridge Office Market:
Demand for office space remains as strong as ever, with 1.2 million sq. ft. of requirements in the market, which compares to 509,000 sq. ft. of existing vacancy. Availability and vacancy both increased slightly, reaching 10.3% and 3.9%, respectively. Office rent decreased slightly to $80.04 per sq. ft. The reason for the slight drop has less to do with softening demand, and much to do with the fact that there is less prime space available.
In West Cambridge availability and vacancy decreased significantly quarter-over-quarter, from 20.7% and 17.9% to 15.6% and 14.0%, respectively. This submarket offers a significant pricing discount, with average asking rents of $49.32 per sq. ft. compared to East Cambridge’s $94.52 per sq. ft.
Cambridge Lab Market:
There are currently 2.2 million sq. ft. of Cambridge lab requirements in the market competing for just 310,000 sq. ft. of vacancy. Availability and vacancy in the Cambridge Lab market rose slightly in Q1, reaching 6.8% and 2.3%, respectively. This is the highest vacancy has been in almost two years. Rents softened slightly from last quarter’s record- breaking number and finished at $86.12 per sq. ft. NNN. Rents are up 8% year-over-year. Rent growth has moderated, and Q1 rents finished at $86.12 per sq. ft. NNN.
