What is Happening in Route 128, 495, and Other Sub Markets: Some Ups and Downs and Some Interesting Trends to Watch


WAYLAND, MA—Greater Boston’s suburban office and industrial markets are signaling some mixed signs, according to the 2022 third-quarter report by R.W. Holmes, one of the largest commercial brokerage firms serving tenants and landlords in Massachusetts for more than 45 years.

Elizabeth Holmes

“The gap between the seller’s expectations and what buyers are willing to pay is widening, especially in the Central 128 market, to the point where sales cannot be completed,” said Elizabeth Holmes, Director of Corporate Services at R.W. Holmes. “Some investors expect a significant 20 percent decline in property values in 2023.”

Here are other trends to watch:

  • Office tenants are relocating outside their current geographical area. With hybrid work, Route 128 companies are contemplating moving to cheaper markets or relocating to shorten the commute of those in the office 5 days/per week.
  • With the market insecurity we are seeing a shift in the Central 128 acquisitions. Local owners and occupiers who can act quickly and are well-capitalized have a great opportunity as institutional investors pull back.   This trend is just starting to take shape in central 128 as 58% of sales were completed by owner-occupants in Q3.
  • Economic headwinds cause some concern, especially paired with worries over Life Sciences Development and demand.
  • Natick and Framingham market showed positive absorption for the first time in a long time. However, this submarket still has over 500,000 square feet of direct space vacancies.
  • The 495 West Market has increased competition for mid-size deals (5,000-10,000 SF). Any group looking for long-term space is seeing aggressive incentives from landlords.
  • Route 128 North/Rt. 3 North industrial market remains hot. So far, in 2022, almost two million SF of new industrial space has come online in the market. In the third quarter alone, 3.6 million SF was absorbed. Tenants are taking space faster than it can be delivered.
  • A lack of supply in the 128 South pushes industrial space into the $20s/SF NNN per year. Sellers in the market have become accustomed to pricing over $150/SF.
  • The industrial/flex market along 495 South continues to be strong, with leasing activity leading the way, given the lack of purchase opportunities. Pre-leased new construction is now a consistent trend as deliveries lag executed leases by up to 12 months.