Market ReviewMetro Boston Real Estate Market Review | 1st Quarter 2012 Committed...
Metro Boston Real Estate Market Review Q1/12 Table of Contents I. Overall Market Conditions ...
Metro Boston Real Estate Market Review Q1/12 Office Market Conditions CLASS A & B OFFICE MARKET Office ...
Metro Boston Real Estate Market Review Q1/12 Boston Office Market FEATURED PROPERTY ...
Metro Boston Real Estate Market Review Q1/12 Cambridge Office Market FEATURED PROPERTY CL...
Metro Boston Real Estate Market Review Q1/12 Suburban Office Market FEATURED PROPERTY ...
Metro Boston Real Estate Market Review Q1/12 Industrial/Flex Market FEATURED PROPERTY ...
Metro Boston Real Estate Market Review Q1/12 Investment Market FEATURED PROPERTY ...
Metro Boston Real Estate Market Review Q1/12NAI Hunneman ContactsCorporate Chris Gotfredson ...
Metro Boston Real Estate Market Review Q1/12 Methodology, Definitions & Submarket Ma...
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Nai Hunneman Market Review Q1 2012

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Transcripts - Nai Hunneman Market Review Q1 2012

  • 1. Market ReviewMetro Boston Real Estate Market Review | 1st Quarter 2012 Committed to Boston. Connected to the World. 303 Congress Street | Boston MA 02110 | 617.457.3400 | www.NAIHunneman.com
  • 2. Metro Boston Real Estate Market Review Q1/12 Table of Contents I. Overall Market Conditions II. Boston Office Market III. Suburban Office Market IV. Industrial/Flex Market V. Investment Sales Market VI. Office Contacts NAI Hunneman | 303 Congress Street | Boston MA 02110 | 617.457.3400 | www.NAIHunneman.com
  • 3. Metro Boston Real Estate Market Review Q1/12 Office Market Conditions CLASS A & B OFFICE MARKET Office Space Direct Sublease Total Average Direct Total Submarket Inventory Vacant Space Vacant Space Vacant Space Rental Rates Vacancy % Vacancy % Financial District 41,567,385 5,869,550 208,197 6,077,747 $39 14.1% 14.6% North Station/North End 7,641,801 309,920 17,076 326,996 $26 4.1% 4.3% South Station/Ft. Point 8,396,958 1,541,630 80,234 1,621,864 $39 18.4% 19.3% Charlestown 3,117,826 113,707 34,064 147,771 $29 3.6% 4.7% Back Bay 14,340,381 642,515 122,579 765,094 $41 4.5% 5.3% Downtown Boston 75,064,351 8,477,322 462,150 8,939,472 $37 11.3% 11.9% East Cambridge 12,103,402 890,496 16,529 907,025 $52 7.4% 7.5% Central Cambridge 5,276,359 566,001 9,900 575,901 $32 10.7% 10.9% West Cambridge 2,334,630 466,504 3,992 470,496 $29 20.0% 20.2% Cambridge 19,714,391 1,923,001 30,421 1,953,422 $44 9.8% 9.9% Route 128 North 17,625,720 2,590,302 40,150 2,630,452 $21 14.7% 14.9% Route 128 Northwest 14,012,020 1,979,154 227,216 2,206,370 $21 14.1% 15.7% Route 128 West 28,602,190 3,699,530 256,855 3,956,385 $25 12.9% 13.8% Route 128 Southwest 5,071,627 623,184 44,791 667,975 $19 12.3% 13.2% Route 128 South 10,248,053 2,121,673 146,472 2,268,145 $20 20.7% 22.1% Route 128 Loop 75,559,610 11,013,843 715,484 11,729,327 $23 14.6% 15.5% I-495 North 6,802,932 1,348,854 78,142 1,426,996 $17 19.8% 21.0% I-495 Northwest 9,292,405 1,352,085 113,363 1,465,448 $17 14.6% 15.8% I-495 West 11,634,502 2,427,576 314,226 2,741,802 $16 20.9% 23.6% I-495 Southwest 2,003,721 506,155 0 506,155 $20 25.3% 25.3% I-495 South 1,509,545 249,451 0 249,451 $19 16.5% 16.5% I-495 Loop 31,243,105 5,884,121 505,731 6,389,852 $17 18.8% 20.5% Metropolitan Boston 201,581,457 27,298,287 1,713,786 29,012,073 $29.34 13.5% 14.4% CLASS A & B OFFICE – AVAILABLE SUBLEASE SPACE & RENTS Office AVAILABLE SUBLEASE SPACE SUBLEASE ASKING RENTS Submarket 2012 Q1 2011 Q4 2011 Q3 2011 Q2 2012 Q1 2011 Q4 2011 Q3 2011 Q2 Downtown Boston 895,883 971,193 1,041,774 1,079,853 $21.92 $26.15 $27.87 $27.72 Cambridge 175,687 222,181 268,294 399,309 $26.35 $25.79 $35.66 $35.58 Route 128 Loop 1,988,543 2,112,798 2,337,090 2,036,832 $18.95 $18.56 $18.07 $18.05 I-495 Loop 941,182 1,053,222 1,074,203 1,082,225 $15.58 $15.67 $14.80 $13.84 Metropolitan Boston 4,001,295 4,359,394 4,721,361 4,598,219 $17.84 $18.40 $19.42 $19.36 CLASS A & B OFFICE – CHANGES FROM PREVIOUS QUARTER & YEAR Office ASKING RENTS VACANCY RATES ABSORPTION Submarket 2012 Q1 2011 Q4 2011 Q1 2012 Q1 2011 Q4 2011 Q1 2012 Q1 2011 Q4 2011 Q1 Downtown Boston $37.40 $37.24 $36.75 11.91% 11.50% 11.81% (214,260) 154,111 (155,396) Cambridge $44.10 $44.42 $39.34 9.91% 9.79% 9.91% 70,896 166,982 5,925 Route 128 Loop $22.52 $22.20 $22.40 15.52% 15.49% 15.67% (181,193) 91,474 230,033 I-495 Loop $17.11 $17.45 $18.44 20.45% 20.61% 18.23% (30,344) (314,639) 206,152 Metropolitan Boston $29.33 $29.17 $28.74 14.39% 14.27% 14.07% (354,901) 97,928 286,714Source: CoStar, NAI Hunneman Commercial Company Prepared: December, 2011Disclaimer: The above data is from sources deemed to be generally reliable, but no warranty is made as to the accuracy of the data nor its usefulness for any particular purpose. NAI Hunneman | 303 Congress Street | Boston MA 02110 | 617.457.3400 | www.NAIHunneman.com
  • 4. Metro Boston Real Estate Market Review Q1/12 Boston Office Market FEATURED PROPERTY CLASS A OFFICE SPACE Direct Sublease Total Average Direct Total Office Space Vacant Vacant Vacant Rental Vacancy Vacancy Submarket Inventory Space Space Space Rates (%) (%) Financial District 31,708,419 4,759,675 164,996 4,924,671 $42 15.0% 15.5% North Station/North End 1,633,531 113,491 0 113,491 $29 6.9% 6.9% Seaport 2,817,663 413,596 4,497 418,093 $60 14.7% 14.8% Charlestown 903,771 14,513 10,089 24,602 $33 1.6% 2.7% Back Bay 11,524,430 496,979 108,951 605,930 $41 4.3% 5.3% 201-207 South Street Downtown Boston 48,587,814 5,798,254 288,533 6,086,787 $42 11.9% 12.5% Boston,MA Office space in the heart of Boston’s leather district. CLASS B OFFICE SPACE Contact Jon Gifford 617.457.3401 Direct Sublease Total Average Direct Total Office Space Vacant Vacant Vacant Rental Vacancy Vacancy Submarket Inventory Space Space Space Rates (%) (%) TRENDS • Financial Institutions are foregoing Financial District 9,858,966 1,109,875 43,201 1,153,076 $28 11.3% 11.7% the reuse of low-rise tower space for North Station/North End 6,008,270 196,429 17,076 213,505 $26 3.3% 3.6% projects that provide higher visibility Seaport 5,579,295 1,128,034 75,737 1,203,771 $28 20.2% 21.6% and branding. Charlestown 2,214,055 99,194 23,975 123,169 $27 4.5% 5.6% • Landlords have re-gained the leverage in Back Bay 2,815,951 145,536 13,628 159,164 $38 5.2% 5.7% leasing negotiations. Downtown Boston 26,476,537 2,679,068 173,617 2,852,685 $28 10.1% 10.8% Source: CoStar, NAI Hunneman Commercial Company. Prepared: April, 2012. Rental Rates are asking rents on direct space as reported by Costar. • B Class office product is the preferred Disclaimer: The above data is from sources deemed to be generally reliable, but no warranty is made as to the accuracy of the data nor its usefulness for any particular purpose. segment to add value and higher exit yields. NOTABLE TRANSACTIONS • TA Associates renews at 200 Clarendon • B & C Class ownerships are examining Street, the John Hancock Building, “tech incubator” conversions of less • Scvngr, Inc. crosses the bridge from 30,000 SF on the 56th floor. appealing spaces. Cambridge in an opportunity play at One Congress Street 30,000 SF. • LogMeIn commits to 100,000 SF at • Companies throughout the greater 320 Summer Street. metro area continue to focus on Boston • State Street Bank backs out of downtown, Proper as the younger aged employee commits to the Seaport for 500,000 SF of • Notable Tenants in the Market: base desires the urban lifestyle and new construction on A Street. – Brown Brother Harriman – 350,000 SF social/professional interaction. – Converse – 150,000 SF • Isobar finalizing lifestyle change by leaving – EBAY – 150,000 SF • Gap between high-rise values and The Arsenal, Watertown for 30,000+/- SF – Enernoc – 100,000 SF low-rise values continues to widen. at the Head House of South Station. – ZipCar – 40,000 SF*Vacant space, vacancy rate values include direct and sublease space. NAI Hunneman | 303 Congress Street | Boston MA 02110 | 617.457.3400 | www.NAIHunneman.com
  • 5. Metro Boston Real Estate Market Review Q1/12 Cambridge Office Market FEATURED PROPERTY CLASS A OFFICE SPACE Direct Sublease Total Average Direct Total Office Space Vacant Vacant Vacant Rental Vacancy Vacancy Submarket Inventory Space Space Space Rates (%) (%) East Cambridge 10,054,293 746,196 16,529 762,725 $55 7.4% 7.6% Central Cambridge 3,184,517 450,159 0 450,159 $33 14.1% 14.1% West Cambridge 1,433,142 299,319 3,992 303,311 $34 20.9% 21.2% Cambridge 14,671,952 1,495,674 20,521 1,516,195 $48 10.2% 10.3% CLASS B OFFICE SPACE Direct Sublease Total Average Direct Total 1430 Massachusetts Avenue Office Space Vacant Vacant Vacant Rental Vacancy Vacancy Submarket Inventory Space Space Space Rates (%) (%) Cambridge, MA East Cambridge 2,049,109 144,300 0 144,300 $40 7.0% 7.0% 45,000 SF in the heart Central Cambridge 2,091,842 115,842 9,900 125,742 $31 5.5% 6.0% of Harvard Square. West Cambridge 901,488 167,185 0 167,185 $21 18.5% 18.5% Contact Ben Sutton 617.457.3262 Cambridge 5,042,439 427,327 9,900 437,227 $33 8.5% 8.7% Source: CoStar, NAI Hunneman Commercial Company. Prepared: April, 2012. Rental Rates are asking rents on direct space as reported by Costar. TRENDS Disclaimer: The above data is from sources deemed to be generally reliable, but no warranty is made as to the accuracy of the data nor its usefulness for any particular purpose.• Demand: Strong Cambridge market demand has again lowered the vacancy vacancy is now down to 11.7% and should • Also making great progress filling up a rates across the board by 1 to 2% in the soon dip into single digits at the current pace former anchor tenant (Pegasystems) space last quarter. Interestingly Class B office of demand. Lab space is now 42.5% of the is 1/101 Main Street. Amazon.com has availabilities bounced back up by several total Class A and B Cambridge space inventory. leased 45,000 SF and United Health percentage points to 8.7%, which reflects 14,000 SF in the wake of a 63,000 SF lease the exodus of some significant Cambridge • If the leasing pace at 210 Broadway is by Nokia last quarter. More deals are in the startups to the adjacent urban and suburban any indication, it won’t take long to backfill pipeline for that complex, which is now submarkets where there is lower pricing 141 Portland Street. 210 Broadway, just quoting gross office rents well into the and more available space. acquired as a mostly vacant asset by Biomed $50s/SF, the highest in East Cambridge• Rental rates: Office rates have spiked in December along with two companion in the current surge. across Cambridge with the fast-dropping buildings, is only left now with 15,000 SF of uncommitted space as leases for some • One Kendall Square continues to be supply in the last two quarters. East 50,000 SF are already in progress. actively upgrading its small and medium lab Cambridge Class A asking rates are now suites for new tenants. GnuBio (10,000 SF) $47–57/SF gross and Class B buildings NOTABLE TRANSACTIONS and the Semprus expansion (12,000 SF) are well into the $30s, with some already are two of the latest there. breaking the $40/SF asking mark. It is very • Alexandria’s 300 Tech Square has landed a difficult to find anything in the $20s unless significant East Cambridge tenant, ALS • The Alewife area is also registering its share it’s in poor condition or distant from a Therapy Development Institute, relocating of the East Cambridge deal flow as Biomed T stop. Lab rates range from the mid from ARE’s 215 First Street. has scored three new lab tenants in Fresh $30s/SF NNN in Alewife to the mid-high • Google and landlord Boston Properties Pond Research Park lab buildings, including $50s/SF NNN for existing units to over received approval from the City of Cambridge Alnylam adding 16,000 SF. The pace is also $60/SF NNN for Class A labs built from shell create new space connecting three existing steady at Equity’s 125-150 CambridgePark with $120 –150/SF landlord allowances. buildings by promising to replace green Drive as Hewlett Packard’s Vertica division space nearby in Kendall Square. Much of leased 45,000 SF and a major upgrade• Vacancy rates: Overall class A vacancy has the expansion was triggered by Google’s program is in progress. now dropped to 10.3% with a continuing contrast between the 7.6% range of East 2011 acquisition of ITA Software and will • The Harvard/Mass Ave submarket registered and Mid-Cambridge and the 21.2% vacant leave a 60,000 SF vacancy in ITA’s 141 a couple significant leases: Harvard University Alewife area. Both submarkets dropped by Portland Street while allowing Google to committed to 21,550 SF at Charles Square approximately 2% in the last quarter which expand to 300,000 SF at 3, 4 and 5 and Mathematica expanded to 37,000 SF indicates swift absorption. The existing lab Cambridge Center. at 955 Massachusetts Avenue. NAI Hunneman | 303 Congress Street | Boston MA 02110 | 617.457.3400 | www.NAIHunneman.com
  • 6. Metro Boston Real Estate Market Review Q1/12 Suburban Office Market FEATURED PROPERTY CLASS A OFFICE SPACE Direct Sublease Total Average Direct Total Office Space Vacant Vacant Vacant Rental Vacancy Vacancy Submarket Inventory Space Space Space Rates (%) (%) Route 128 North 9,167,444 1,470,553 8,217 1,478,770 $25 16.0% 16.1% Route 128 Northwest 8,352,129 976,976 87,393 1,064,369 $24 11.7% 12.7% Route 128 West 14,875,842 1,955,106 218,602 2,173,708 $29 13.1% 14.6% Route 128 Southwest 1,478,886 104,058 16,791 120,849 $23 7.0% 8.2% Route 128 South 4,745,654 1,123,584 116,609 1,240,193 $24 23.7% 26.1% Route 128 Loop 38,619,955 5,630,277 447,612 6,077,889 $26 14.6% 15.7% I-495 North 3,414,862 695,856 60,039 755,895 $17 20.4% 22.1% I-495 Northwest 3,813,396 341,312 27,396 368,708 $18 9.0% 9.7% 16 Elizabeth Drive I-495 West 5,481,128 1,064,128 142,191 1,206,319 $18 19.4% 22.0% Chelmsford, MA I-495 Southwest 788,793 269,917 0 269,917 $21 34.2% 34.2% First Class Office/R&D space in an I-495 South 137,000 25,478 0 25,478 $21 18.6% 18.6% appealing campus setting I-495 Loop 13,635,179 2,396,691 229,626 2,626,317 $18 17.6% 19.3% Contact Michael McCarthy 617.457.3224 CLASS B OFFICE SPACE TRENDS Direct Sublease Total Average Direct Total• Development is showing signs of life in Office Space Vacant Vacant Vacant Rental Vacancy Vacancy Submarket Inventory Space Space Space Rates (%) (%) Burlington with Duffy Properties most likely breaking ground on 78 Blanchard Street Route 128 North 8,458,276 1,119,749 31,933 1,151,682 $18 13.2% 13.6% this Spring and Keurig leaning towards Route 128 Northwest 5,659,891 1,002,178 139,823 1,142,001 $18 17.7% 20.2% a build-to-suit project in Burlington that Route 128 West 13,726,348 1,744,424 38,253 1,782,677 $22 12.7% 13.0% could break ground in 2013. Route 128 Southwest 3,592,741 519,126 28,000 547,126 $17 14.4% 15.2% Route 128 South 5,502,399 998,089 29,863 1,027,952 $17 18.1% 18.7%• 10 Corporate Drive in Burlington, one of the biggest existing blocks of new office Route 128 Loop 36,939,655 5,383,566 267,872 5,651,438 $19 14.6% 15.3% space in the Burlington market has had I-495 North 3,388,070 652,998 18,103 671,101 $17 19.3% 19.8% strong activity due to the building’s quality, I-495 Northwest 5,479,009 1,010,773 85,967 1,096,740 $16 18.4% 20.0% and the lack of large contiguous office I-495 West 6,153,374 1,363,448 172,035 1,535,483 $15 22.2% 25.0% space options in Burlington. I-495 Southwest 1,214,928 236,238 0 236,238 $19 19.4% 19.4% I-495 South 1,372,545 223,973 0 223,973 $19 16.3% 16.3%• An interesting assemblage of space that I-495 Loop 17,607,926 3,487,430 276,105 3,763,535 $16 19.8% 21.4% seems to be coming into focus is at Crosby Source: CoStar, NAI Hunneman Commercial Company. Prepared: April, 2012. Rental Rates are asking rents on direct space as reported by Costar. Corporate Center in Bedford. Due to a Disclaimer: The above data is from sources deemed to be generally reliable, but no warranty is made as to the accuracy of the data nor its number of tenants downsizing or moving usefulness for any particular purpose. out, the park can put together up to 250,000 SF across five buildings (including users, as well as a few large 50,000–100,000 • NAI Hunneman leased 23,397 SF at 121,000 SF at Building 28). With the SF users exploring options, but not in a 307 Waverley Oaks Road in Waltham. majority of the park vacant, look for rush to complete a new deal. • RSA Security leased 188,000 SF at opportunities for competitive rental rates. • The deals that are completed in the North Bedford Woods in Bedford.• Entegris a provider of critical products and office market are for those spaces with • Potpourri Group leased 81,068 SF at materials used in advanced high-technology modern/amenity rich options. Brookwood Business Center Building 2 manufacturing, recently bought 9 Crosby in Billerica. Drive in Bedford ($89/SF), and will be making NOTABLE TRANSACTIONS a significant investment in the building to • Welch’s leased 85,000 SF at 300 Baker transform it into a state-of-the-art laboratory • Cadmus Group leased 40,095 SF at Avenue in Concord. facility. 100 Fifth Avenue in Waltham. • CBeyond has put approximately 21,000 SF• Activity in the 128 North market remains flat • Mathworks renewed 44,064 SF at on the sublease market at 1 Burlington with a small handful of 5,000–10,000 SF Cochituate Place in Framingham. Woods. NAI Hunneman | 303 Congress Street | Boston MA 02110 | 617.457.3400 | www.NAIHunneman.com
  • 7. Metro Boston Real Estate Market Review Q1/12 Industrial/Flex Market FEATURED PROPERTY INDUSTRIAL MARKET Industrial Space Vacant Vacancy Rental Submarket Inventory Space* Rate* Rate (NNN) Boston Central Core 21,660,482 1,852,758 8.6% $8.31 Route 128 North 27,081,860 1,693,731 6.3% $6.14 Route 128 Northwest 4,731,707 204,167 4.3% $5.62 Route 128 West 10,986,370 224,859 2.0% $6.98 Route 128 Southwest 11,970,319 762,754 6.4% $5.10 Route 128 South 23,738,231 2,952,043 12.4% $5.05 Route 128 Loop 78,508,487 5,837,554 7.4% $5.74 I-495 North 15,480,474 1,220,565 7.9% $4.70 I-495 Northwest 10,696,859 1,644,591 15.4% $4.45 Cherry Hill Corporate Center I-495 West 16,772,060 1,701,340 10.1% $5.07 Danvers, MA I-495 Southwest 15,470,554 2,019,770 13.1% $4.99 I-495 South 13,374,501 2,525,147 18.9% $4.14 Office/lab/flex and industrial space I-495 Loop 71,794,448 9,111,413 12.7% $4.71 available amongst four buildings. Metropolitan Boston 171,963,417 16,801,725 9.8% $5.63 Contact Greg Klemmer 617.457.3253 FLEX/R&D MARKET TRENDS Industrial Space Vacant Vacancy Rental Submarket Inventory Space* Rate* Rate (NNN) North Market Boston Central Core 7,405,160 690,012 9.3% $16.49• Leasing activity is beginning to increase but Route 128 North 13,950,679 1,730,306 12.4% $8.25 vacancy is still hovering around 13%. Route 128 Northwest 10,080,809 1,885,963 18.7% $8.59• Tenants are drawn to more modern/ Route 128 West 7,949,847 503,027 6.3% $11.27 updated and functional options (clear Route 128 Southwest 5,502,521 834,944 15.2% $8.85 heights and dock doors). Route 128 South 3,632,460 496,076 13.7% $8.76 Route 128 Loop 41,116,316 5,450,316 13.3% $9.04• Rates remain flat, approximately $5.50 – I-495 North 8,761,829 1,775,823 20.3% $7.86 $7.50/SF. I-495 Northwest 5,697,443 400,053 7.0% $7.99• Larger tenants are making up most of the I-495 West 10,253,174 2,305,084 22.5% $6.87 activity. I-495 Southwest 3,752,887 162,781 4.3% $10.30 South Market I-495 South 2,182,469 109,485 5.0% $8.56 I-495 Loop 30,647,802 4,753,226 15.5% $7.90• Over the past year we have seen significant Metropolitan Boston 79,169,278 10,893,554 13.8% $9.30 moves in the food industry. Harbar Foods in Source: CoStar, NAI Hunneman Commercial Company. Prepared: April, 2012. Disclaimer: The above data is from sources deemed to be Canton acquired 83,000 SF of additional generally reliable, but no warranty is made as to the accuracy of the data nor its usefulness for any particular purpose. Vacant space, vacancy rate office/warehouse space; Chex Finer foods values include direct and sublease space. Average Rental Rates are asking rents on direct space as reported by Costar moved and expanded into 58,000 SF in Mansfield; Trader Joe’s finally found a home NOTABLE TRANSACTIONS South Market in Middleboro, leasing 132,000 SF at 30 • NAI Hunneman leased the remainder of Commerce Boulevard. North Market 176 S. Washington Street, Norton to the existing tenant (Blend and extend).• Medical industry also continues to grow. • DHL leased 118,196 SF at Centennial Drive The recently-completed Myles Standish in Peabody. • NAI Hunneman leased 22,500 SF of office Medical Center in Taunton is currently being space to Dresser Inc. at 50 Thomas Patten circled by medical practices in the area • ShoeBuy leased 76,000 SF at 36 Cabot Drive, Randolph. looking for new space; Dedham Medical Road in Woburn. has broken ground on a new 100,000 SF • NAI Hunneman sells 30,000 SF of office health center in Norwood. • CitySports renewed 25,000 SF at 100 space at 315 University Avenue, Norwood• Walpole Park South’s new spec building to Heathrow. Progress Way in Wilmington. has been completed and activity has been • Excel, Inc. leased from Invesco; 181,980 SF very strong. • CNE Direct leased 40,000 SF at Two Fifth of industrial space at 530 John Hancock• Positive absorption continues to occur. Street in Peabody. Road, Taunton. NAI Hunneman | 303 Congress Street | Boston MA 02110 | 617.457.3400 | www.NAIHunneman.com
  • 8. Metro Boston Real Estate Market Review Q1/12 Investment Market FEATURED PROPERTY METRO BOSTON OFFICE BUILDING SALES TRENDS 2008 2009 2010 2011 2012 YTD Metro Boston Office Buildings Sales Volume $1,713,511,785 $1,234,194,486 $1,075,866,674 $3,620,549,942 $1,205,102,555 # of Sales 55 21 41 63 18 Median Cap Rate 6.06% 8.90% 7.33% 7.10% 6.25% Median $/SF $215 $197 $179 $173 $239 Metro Boston Retail Buildings Sales Volume $489,204,432 $168,647,666 $365,117,501 $1,655,884,033 $119,585,300 # of Sales 38 16 29 45 12 Median Cap Rate 6.69% 7.75% 7.65% 7.25% 6.60% Median $/SF $406 $331 $223 $292 $205 Metro Boston Industrial / R&D Sales Volume $522,462,247 $190,443,874 $194,286,968 $914,178,341 $172,352,101 # of Sales 47 19 18 45 17 Median Cap Rate 8.20% 9.23% 8.97% 8.10% 11.00% Median $/SF $81 $62 $83 $70 $32 265-Unit Residential Metro Boston Multifamily Sales Volume $744,738,685 $443,040,096 $631,825,406 $1,148,016,991 $287,230,000 Building Portfolio # of Sales 34 19 29 42 14 Malden & Medford, MA • $23.6 Million Median Cap Rate 6.80% 6.83% 7.50% 5.24% 6.25% Metro Boston Totals Sold by NAI Hunneman Sales Volume $3,469,917,149 $2,036,326,122 $2,267,096,549 $7,338,629,307 $1,784,269,956 # of Sales 174 75 117 195 61 TRENDS Median Cap Rate 6.94% 8.18% 7.86% 6.92% 7.53% Median $/SF $176 $147 $121 $134 $119• Cap rates are trending downward in core markets as interest rates have fallen in Q1 2012. Improved credit quality and lower NOTABLE BUILDING SALES 2012 YTD vacancies are producing historic prices. Building Buyer / Seller SF Price $/SF Cap Rate Office Buildings• Vacancy in commercial properties is still not 100 Federal Street Boston Properties / 1,304,899 $615,000,000 $471 4.4% looked upon favorably with the exception of Boston Bank of America the 128 West market where investors are Hampshire Street BioMed Realty Trust / 286,878 $119,000,000 $415 5.9% Portfolio Cambridge MetLife, Inc. willing to pay for smaller vacancies that can be filled quickly. 535-545 Boylston Street. Clarion Partners / 190,702 $87,100,000 $457 4.8% Boston Westport Point Capital• The multi-family sector remains very active 25 First Street Divco West / 220,750 $79,000,000 $358 5.4% Cambridge AEW Capital Mgmt. with rents achieving levels as high as pre 2007. Rising rents and historically low 179 Lincoln Street Invesco / Milllenium 220,311 $75,000,000 $340 6.3% Boston Partners vacancies are producing an attractive Apartment Buildings investment environment. Kimball Towers Praedium Group / 256 $47,875,000$187,012 — Burlington New York Life NOTABLE TRANSACTIONS Regency Place CBRE Global / 120 $24,400,000$203,333 5.6%• Praedium and Taymil Partners purchased Wilmington Clarion Partners 256-unit Kimball Woods in Burlington for Colonial Village JLG RE Holdings / 148 $14,000,000 $94,595 6.3% $47.8 million. Methuen CPM, Inc. Retail• Boston Properties buys 100 Federal Street Stop & Shop Plaza ✳ Katz Properties / Invesco 74,739 $15,400,000 $206 7.4% for $615 million. Whole Foods Acadia Realty Trust / 40,000 $12,200,000 $305 5.8% Cambridge Kennedy Development Group• NAI Hunneman sold 340 River Street Industrial (40,000 SF) retail center for $12.2 million. 100 & 111 Adams Street NIP Owner, LLC / 22,568,634 $802,090 $28 — Clinton Hackman Capital Partners• NAI Hunneman sold the four building 1.1 Source: CoStar, NAI Hunneman Commercial Company. Prepared: April, 2012. Disclaimer: The above data is from sources deemed to be generally reliable, but no warranty is made as to the accuracy of the data nor its usefulness for any particular purpose. Vacant space, vacancy rate million SF Rubenstein Portfolio for $25 million. values include direct and sublease space. Average Rental Rates are asking rents on direct space as reported by Costar NAI Hunneman | 303 Congress Street | Boston MA 02110 | 617.457.3400 | www.NAIHunneman.com
  • 9. Metro Boston Real Estate Market Review Q1/12NAI Hunneman ContactsCorporate Chris Gotfredson J.P. Plunkett Doug Jacoby Senior Vice President Executive Vice President Senior Vice PresidentStuart Pratt 617.457.3255 617.457.3230 617.457.3237CEO cgotfredson@naihunneman.com jplunkett@naihunneman.com djacoby@naihunneman.com617.457.4333spratt@naihunneman.com Greg Larsen Greg Klemmer Scott Dragos Senior Vice President Executive Vice President Senior Vice PresidentMike DiGiano 617.457.3321 617.457.3253 617.457.3248Executive Vice President/COO glarsen@naihunneman.com gklemmer@naihunneman.com sdragos@naihunneman.com617.457.3410mdigiano@naihunneman.com Suburban Leasing Cathy Minnerly Dan Collins Executive Vice President Vice PresidentDavid Finnegan Steve James 617.457.3334 617.457.3252Director of Marketing Executive Vice President cminnerly@naihunneman.com dcollins@naihunneman.com617.457.3238 617.457.3263dfinnegan@naihunneman.com sjames@naihunneman.com David Gilkie Sean Ryan Senior Vice President AssociateDowntown-Cambridge Leasing James Boudrot 617.457.3202 617.457.3357 Senior Vice PresidentJeff Becker dgilkie@naihunneman.com sryan@naihunneman.com 617.457.3328Senior Vice President jboudrot@naihunneman.com617.457.3424 Tim Brodigan Dan McGeejbecker@naihunneman.com Vice President Associate Brendan Daly 617.457.3247 617.457.3266 Vice PresidentJon Gifford tbrodigan@naihunneman.com dmcgee@naihunneman.com 617.457.3281Senior Vice President bdaly@naihunneman.com617.457.3401 Ovar Osvold Henry Lieberjgifford@naihunneman.com Associate Associate Michael McCarthy 617.457.3222 617.457.3383 Vice PresidentDavid Cooney oosvold@naihunneman.com hlieber@naihunneman.com 617.457.3224Vice President mmccarthy@naihunneman.com617.457.3305 Investment Sales Gina Barrosodcooney@naihunneman.com Associate Evan Gallagher David Ross 617.457.3261 Vice President Executive Vice PresidentBonny Doorakian dmcgee@naihunneman.com 617.457.3350 617.457.3392Vice President egallagher@naihunneman.com dross@naihunneman.com617.457.3317 Robert Titobdoorakian@naihunneman.com Associate Industrial Leasing Bob Tito 617.457.3355 Executive Vice PresidentBen Sutton Trey Agnew rtito@naihunneman.com 617.457.3231Senior Associate Executive Vice President btito@naihunneman.com617.457.3424 617.457.3363 Mitchell Leveybsutton@naihunneman.com tagnew@naihunneman.com Associate Carl Christie 617.457.3227 Executive Vice President mlevey@naihunneman.com 617.457.3394 cchristie@naihunneman.com NAI Hunneman | 303 Congress Street | Boston MA 02110 | 617.457.3400 | www.NAIHunneman.com
  • 10. Metro Boston Real Estate Market Review Q1/12 Methodology, Definitions & Submarket MapMethodologyWe have divided the Metro Boston area into four submarkets foroffice properties: Boston, Cambridge, Route 128 and Route 495.Industrial and Flex/R&D properties are divided into three submarkets:Central Core (Boston, Cambridge, and Inner Suburbs), Route 128and Route 495.Absorption (Net)The change in occupied space in a given time period.Average Asking Rental RateRental rate as quoted from each building’s owner/managementcompany: for office space, a full service rate was requested; for retail,a triple net rate requested; for industrial, a triple net rate basis.Building ClassClass A product is office space of steel and concrete construction,quality tenants, excellent amenities & premium rates. Class B productis office space with fair to good finishes and a wide range of tenants.Cap Rate Overall VacancyThe net operating income divided by the sales price or value of a All unoccupied lease space, either direct or sublease.property expressed as a percentage. SubleaseCBD Arrangement in which a tenant leases rental property to another andCentral business district. the tenant becomes the landlord to the subtenant.Direct Vacancy Total Square FootageSpace currently available for lease directly with the landlord or building Net rentable area considered available for lease; includes subleaseowner. space. NAI Hunneman | 303 Congress Street | Boston MA 02110 | 617.457.3400 | www.NAIHunneman.com
  • 11. Commercial Real Estate Services, WorldwideAsia PacficCanadaEurope, Middle East and AfricaLatin America and the CaribbeanUnited States303 Congress StreetBoston MA 02110Tel 617.457.3400Fax 617.457.3268www.NAIHunneman.com Committed to Boston. Connected to the World.

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