Financial District Office Market Q1 Q1 2018 Financial District Statistics

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Financial District Office Market Q1 Q1 2018 Financial District Statistics CHARLESTOWN 2018 FINANCIAL DISTRICT OFFICE MARKET Q1 Q1 2018 FINANCIAL DISTRICT STATISTICS NORTH STATION TOTAL UNDER DIRECT SUBLEASE TOTAL Q1 YTD ASKING INVENTORY CONSTRUCTION VACANT VACANT VACANCY NET NET RENT (SF) (SF) (SF) (SF) RATE ABSORPTION (SF) ABSORPTION (SF) ($/SF) CLASS A 28,892,878 333,283 1,828,452 173,766 6.9% 44,344 44,344 $60.20 CLASS B 6,796,046 48,000 825,869 26,878 12.5% (89,671) (89,671) $50.43 TOTAL 35,688,924 381,283 2,654,321 200,644 8.0% (45,327) (45,327) $57.15 FEATURED DEAL SUBMARKET TRENDS 133 FEDERAL STREET, BOSTON 5,044 SF • Office vacancies in the Financial District remained stable during the first quarter, ArrowsNAI Hunneman’s Urban Advisory Group recently but slightly negative absorption kept vacancies from breaching 8%. Asking rents Direct Vacancy Sublease Vacancy 12-month Absorption Asking Rent represented Accu-Time Systems in a long-term Down Up Up FINANCIAL stayed the course as well; averaging more than $57/SF.Up lease at 133 Federal Street in the Financial DISTRICT District. The Connecticut-based technologyTotal Inventory Under Construction • A handful of large expansions were executed in the firstDirect quarter. Vacant WeWork is openingSublease VacantClasscompany A Total will be Vacancy relocating Rate fromQ1 175 Net AbsorptionFederal YTD 28,892,878 Net Absorption 333,283 Class B 6,796,046 48,000 another Downtown location and will backfill 100,000 square feet 1,828,452 of Digitas’ space 173,766 Street into 5,044 square6.9% feet on the ninth floor 44,344 44,344 825,869 Total 26,878 12.5% (89,671) 35,688,924 (89,671) 381,283 OFFICE MARKET at 33 Arch Street. Spotify is leasing 75,000 square feet at Center Plaza, with plans of their new building this summer. 2,654,321 200,644 8.0% (45,327) (45,327) to relocate its operations from Somerville. Notable Transactions Tenant/Buyer Address City Nixon PeabodyNotable Transactions 53 State NOTABLEStreet TRANSACTIONSBoston WeWork 33 Arch Street Boston • Nixon Peabody plans to relocate its office to a smaller footprintSize at 53 State Street. Nixon Spotify 3 Center Plaza Boston The law firm currently occupies 168,000 square feet at 100 Summer 105,500 Street and Peabody MIDTOWN Cambridge Biomarketing 53 State Street Boston 100,000 will take just over 100,000 square feet at the new location. Industrious 100 Summer Street Boston BACK BAY 75,000 WeWork SOUTH 38,592 STATION • Exan Capital acquired 40 Court Street, a 109,705-square-foot Class 28,711 B asset in the Featured Deal Spotify Financial District, for $54 million or $492 per square foot at a 4% cap rate. Stars SEAPORT NAI Hunneman's Urban Advisory Group recently represented Accu-Time Investment paid just $31 million for the building in 2014. SystemsCambridge in a long -term lease at 133 Federal Street in the Financial District. The ConnecticutBiomarketing-based technology company will be relocating from 175 Federal into 5,044 square feet on the ninth floor of their new building this summer. • Although sales volume has slowed in Downtown Boston, a handful of other buildings are Industrious on the market as well. In the Financial District, the sale of 28 State Street is expected to close soon, and 75 State Street and 53 State Street both came on the market recently. 25K SF 50K SF 75K SF 100K SF 125K SF CLASS A & B RENTS Vacancy and Net Absorption VACANCY AND NET ABSORPTION $70 800 Net Absorption 14% 2013 (99,014) -99.014 $60 600 12% 2013 37,406 37.406 $50 400 2013 349,966 349.96610% $40 200 2013 (106,945) -106.9458% 2014 (11,160) -11.16 $30 0 6% SF (000s) SF 2014 (258,079) -258.079 $20 -200 2014 39,403 39.4034% $10 -400 2014 29,319 29.3192% DIRECT SUBLEASE 12-MONTH ASKING $0 2015 588,567 588.567 STATISTICS -600 0% VACANCY VACANCY ABSORPTION RENT 2014 2015 2016 2017 OVER THE LAST 12 MONTHS 2013 2014 2015 2015 2016366,552 2017 2018366.552 Class B Class A 2015 Net Absorption 268,915Vacancy 268.915 2015 (202,126) -202.126 2016 516,776 516.776 2016 (390,641) -390.641 Submarket Trends 2016 57,085 57.085 2016 47,240 47.24 - Office vacancies in the Financial District remained stable, during the first quarter, but slightly negative 303 Congress Street | Boston, MA 02210 | 617.457.3400 Class A&B Rents 303 Congress Street | Boston, MA 02210 | 617.457.3400 absorption kept vacancies from breaching 8%. Asking rents stayed the course as well; averaging more 2017 (49,493) -49.493 www.NAIHunneman.com than $57/SF. 2017 www.NAIHunneman.com10,012 10.012 2017 (12,777) -12.777 - A handful of large expansions were executed in the first quarter. WeWork is opening another Downtown location and will backfill 100,000 square feet of Digitas' space at 33 Arch Street. Spotify is 2017 168,053 168.053 leasing 75,000 square feet at Center Plaza, with plans to relocate its operations from Somerville. 2018 (45,327) -45.327 - Nixon Peabody plans to relocate its office to a smaller footprint at 53 State Street. The law firm currently occupies 168,000 square feet at 100 Summer Street and will take just over 100,000 square feet at the new location. - Exan Capital acquired 40 Court Street, a 109,705-s quare-foot Class B asset in the Financial District, for Class B Class A $54 million or $492 per square foot at a 4% cap rate. Stars investment paid just $31 million for the building in 2014. - Although sales volume has slowed in Downtown Boston, a handful of other buildings are the market as well. In the Financial District, the sale of 28 State Street is expected to close soon, and 75 State Street .
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