BOSTON– CBRE today released its Cambridge Office and Lab MarketView for the second quarter of 2019, reporting that office vacancy remained steady at 4 percent and rents flat at $79.68 per square feet.
“Once again, the Cambridge market was dominated by life science,” said Suzanne Duca, Director of Research for CBRE. “Tenants and investors alike continue to snap up spaces in all submarkets of Cambridge. We have seen a trend of smaller spaces, from co-working to the Cambridge Innovation Center.”
Cambridge Office Market:
Demand for office space remains as strong as ever, with over 900,000 sq. ft. of requirements in the market, which compares to 526,000 sq. ft. of existing vacancy. Availability dropped from 10.3% to 7.1%, the lowest it has been in three years, and vacancy remained steady at 4.0%. Rents remained flat at $79.68 per sq. ft., but like last quarter, this was due to prime spaces coming off the market rather than a softening of demand.
In East Cambridge availability fell from 9.5% to 5.0%. Vacancy in East Cambridge was just 1.0%, and rents fell from $94.52 per sq. ft. to $92.62 per sq. ft., quarter-over-quarter.
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 saw an uptick to 7.7%, but vacancy remained flat at 2.3%. Absorption was modestly positive at 20,000 sq. ft., which brings year-to-date absorption to negative 62,000 sq. ft. Asking rents in the Cambridge lab market saw a marked decrease from the prior quarter, dropping from $86.12 per sq. ft. NNN to $82.89 per sq. ft. NNN. However, this was due to new space coming on the market in lower-priced West Cambridge, not to a decrease in pricing.
Rents in the East Cambridge lab market were $93.12 per sq. ft. NNN. Availability and vacancy in East Cambridge were 6.5% and 1.8%, respectively.