BOSTON– A new CBRE report ranks East Cambridge as the submarket in the U.S. and Canada with the highest average rent premium at 128% when compared to the city’s overall office market ($92.62 vs. $40.55 per sq. ft. per year).
CBRE’s annual Tech-30 report measures the tech industry’s impact on office rents in the 30 leading technology markets in the U.S. and Canada. East Cambridge showed a 16.3 percent rent growth in the past two years with a vacancy rate of just 1 percent, the lowest of any top submarket in the U.S. and Canada. Net absorption in the submarket came in at 14.8 percent, ranking #2 among the top Tech-30 submarkets.
“Boston’s office rents have continued to increase throughout this cycle driven by new construction pricing, tightening fundamentals, and the continued demand by and expansion of Technology, Advertising, Media and Information companies,” stated Kevin Kennedy, senior vice president at CBRE in Boston.
Overall, CBRE ranks Boston as the seventh-fastest growing tech market with overall office rent growth of 12.2 percent between Q2 2017 and Q2 2019. Boston also saw high-tech employment grow 7.6 percent during 2017 and 2018, accounting for 26.9 percent of all new office jobs.
Office-rent growth has been strong for the Tech-30 in the past two years, with 10 markets posting double-digit percentage growth in average rents over this period, led by San Francisco. Overall, rents increased in 28 of the Tech-30 markets since 2017.
“The North American tech industry has diversified its economic base as it has grown, expanding its presence in many Tech-30 markets,” said Colin Yasukochi, Executive Director for research for CBRE’s Tech and Media Insights Center and co-author of the report. “Meanwhile, large tech companies have been an ongoing source of demand; The 10 most active tech companies leasing office space since 2013 account for 27 percent of overall tech-industry leasing.”