WALTHAM, MA—With Boston area landlords taking a “wait and see approach,” there is little to no change on asking rents for office, lab, and industrial space, says R.W. Holmes Realty Co. President Garry Holmes his quarterly report.
“COVID-19 will certainly have a major impact on the commercial real estate sector,” Mr. Holmes said in the report. “However, there is such limited data from Q2 that it will take the balance of the year until the extent of the impact becomes more pronounced.”
Here are some other highlights from the report:
- Activity in the market is from lab and industrial users, with the office market very quiet.
- Amazon is gobbling up high bay warehouse with new leases literally every month.
- Office tenants will now focus on “clean” buildings rather than “green” buildings.
- Goodbye cube farms and benching – hello small private offices.
- Inquiries for satellite suburban offices are increasing but no trends are apparent yet.
- Work from home will definitely reduce the office footprint for many companies.
What are folks at R.W. Holmes watching:
“Sublease space is increasing in Boston but we are not seeing signs of major blocks of office space hitting the market in the suburbs,” says Mr. Holmes, adding that Trip Advisor placing 100,000 square feet on the market at their Needham headquarters would be one of the few exceptions to date.
He said industrial properties are the big winners.
“Industrial was already the darling for investors over the past couple years. As a result of COVID, consumers are shopping much more online. The pronounced shift to e-commerce will be one of the major factors in continuing to drive demand for industrial space,” Mr. Holmes said in the report.
