Boston– CBRE released its Cambridge Office and Lab MarketView for the third quarter of 2019.
“Tech and biotech companies continue to find value being proximate to MIT and Harvard University, and developers and owners are responding,” stated Connor Channell, Senior Research Analyst for CBRE New England. “With the highly educated workforce and the new developments delivering over the next several years, Cambridge will remain the place to be for years to come.”
Office: Availability dropped to 6.0%, the lowest it has been in over five years, and vacancy remained stable at 4.0%. Quarterly absorption reached 164,100 sq. ft., and year-to-date absorption surpassed 960,000 sq. ft. Asking rents dipped 11% to $71.98 per sq. ft. largely due to the lack of available high-end space, rather than a lack of demand.
East Cambridge’s availability is just 3.2%, while lower-priced West Cambridge’s availability is 15.7%. Vacancy in East Cambridge remains the lowest across the Cambridge market at 1.3%.
Lab: Availability dropped to 5.4%, and vacancy did see a slight increase to 2.7%. The market posted positive absorption of 507,500 sq. ft. for the third quarter and has seen 445,500 sq. ft. of year-to-date absorption. Asking rents increased to historic highs at $92.38 per sq. ft. triple net (NNN). Class A lab buildings are seeing asking rents of $105.00 per sq. ft NNN. With demand of two million sq. ft. and only 770,000 sq. ft. available, landlords can continue to push rents.
In East Cambridge, availability dropped to 4.6% and vacancy increased slightly to 2.0%. West Cambridge lab rents have increased 6.5%, up to $72.78 per sq. ft. NNN, and availability has decreased to 12.5% from 20.3% last quarter.
