What’s going on in... MID-YEAR 2020

Market Insights for Tenants: At Exis, our loyalties aren’t compromised; because we do not represent landlords, we are 100% focused on providing market conditions and strategies that can benefit tenants in each marketplace – leveraging this information for your economic advantage. We’re pleased to provide the below in-depth information; contact us for ways we can help you get the BEST deal on your commercial space needs.

OVERVIEW FUNDAMENTALS Forecast The spillover into January, February, and March from 2019 YTD net absorption feels like decades ago, but 2020 started just as strong as the (1.1) MSF previous booming years in Boston. Acquisitions to turn office Under construction 5.1 MSF into life science buildings, large tech company requirements, MID-YEAR 2020 What’sand rents continuinggoing toonclimb in... all dominated Boston’s office Average asking rent (gross) $67.61 dynamics until mid-March. Since then, the COVID-19 global pandemic has brought the economy, and office real estate Concessions Flat to increasing market, to its knees. Active lease requirements based on increased spaceBOSTON needs or upcoming lease expirations were immediately paused and continue to be paused four months later. Employers aren’t sure how or when to send back Market Largest Total Marketemployees Insightsto the foroffice, Tenants: and what At Exis, started our loyalties as a crash aren’tcourse compromised; because we do not represent landlords, we are 100% focusedon Work onfrom providing Home marketis now conditions being considered and strategiesa necessary that can benefit tenantsSize in each marketplaceOffice Deal– leveraging thisVacancy information forcomponent your economicof long advantage.-term planning We’re. The pleased sublease to provide market the has below in-depth73.8 information; MSF contact108,200 us for SFways we can help8.9%* you get thegrown BEST from deal1.4 onMSF yourin commercialBoston to over space2 MSF needs.during COVID, with more to come. The sublease market has not yet had the *Availability rate is 11.4% OVERVIEWexpected effect of lowering asking rents for direct space, FUNDAMENTALS Forecast Theaddingspillovera rent into standoffJanuary,amid February,an almost and Marchentirelyfromstalled2019 YTD net absorption feelsmarketplacelike decades. Tenants ago, but are2020 looking startedto justtake as advantagestrong as the of (1.1) MSF previousassumed boomingasking rent years decreasesin Boston that. Acquisitions landlords haveto turn thusoffice far Under construction 5.1 MSF What’sBOSTON going on in... MARKETintobeen lifeunwillingscience toOVERVIEWbuildings,drop. large tech companyMIDrequirements,-YEAR 2020 and rents continuing to climb all dominated Boston’s office Average asking rent (gross) $67.61 MID-YEAR 2020. TOTALdynamics VACANCY until mid-March. Since then, the COVID-19 global AVERAGE ASKING RENTS pandemic has brought the economy, and office real estate Concessions 10.00% Flat to increasing OVERVIEWBOSTON market,MARKETto its FUNDAMENTALSknees. Active lease requirements FORECAST based on increased space needs or upcoming lease expirations8.9%*were $80.00 The spillover into January, February, and March from immediately9.00% paused and continue to be paused four months Market Size 8.1% 78.3 MSF $70.00 2019 feels like decades ago, but 2020 started just later. Employers aren’t sure how or when to send back 8.00% $60.00 Marketas strong Insights as the for Tenants:previous Atbooming Exis, our yearsloyalties in aren’t Boston. compromised; employeesTotal Vacancy becauseto the weoffice, do not and representwhat started landlords, as8.9%* awecrash are 100%course Market Largest Total focused on providing market conditions and strategies that can benefit tenants in7.1% each marketplace – leveraging this information Acquisitions to turn office into life science on Work from Home is now being considered a necessary Size Office Deal Vacancy for your economic advantage. We’re pleased to provide the below in7.00%-depth information; contact us for6.6% ways we can help you get $50.00 buildings, large tech company requirements, and componentYTD Net Absorptionof long-term planning. The sublease6.3%(1.1) MSF market has 73.8 MSF 108,200 SF 8.9%* the BEST deal on your commercial space needs. grown from 1.4 MSF in Boston to over 2 MSF during COVID, $40.00 6.00% rents continuing to climb all dominated Boston’s office withUndermore Constructionto come. The sublease market has5.1 not MSFyet had the OVERVIEW FUNDAMENTALS *Availability$30.00 rate is 11.4% dynamics until mid-March. Since then, the COVID-19 expected effect of lowering asking rents for direct space,Forecast The spillover into January, February, and March from 2019 5.00% global pandemic has brought the economy, and addingAverageYTD neta Asking absorptionrent Rent standoff (Gross)amid an almost$67.61entirely(1.1) MSFstalled $20.00 feels like decades ago, but 2020 started just as strong as the marketplace. Tenants are looking to take advantage of 2015 2016 2017 2018 2019 YTD previousoffice boomingreal estate years market,in Boston to its. Acquisitions knees. to turn office 4.00% assumedConcessionsUnder constructionasking Flat rent to Increasing decreases that landlords have5.1 MSF thus far 2020 into life science buildings, large tech company requirements, 2016 2017 2018 2019 YTD 2020 been unwilling to drop. Class A Class B andActive rents lease continuing requirementsto climb all dominatedbased on Boston’s increasedoffice *Availability rate is 11.4% Average asking rent (gross) $67.61 dynamics until mid-March. Since then, the COVID-19 global space needs or upcoming lease expirations were TOTAL VACANCY AVERAGE ASKING RENTS pandemic has brought the economy, and office real estate TOTAL VACANCY immediately paused and continue to be paused four Concessions Flat to increasing market, to its knees. Active lease requirements based on For10.00% more information, please contact: increasedmonths later. space Employers needs or upcoming aren’t sure lease how expirations or whenwere to 8.9%* $80.00 immediatelysend back pausedemployees and continueto the office,to be paused and fourwhat months started 9.00% lateras a. crashEmployers course aren’t on sureWorkhow from or Home when isto nowsend being back 8.1% $70.00 exisglobal.com | [email protected] employeesconsideredto thea necessaryoffice, and what component started as aofcrash long-termcourse Neil8.00% SchneiderMarket | [email protected] | 617Total-542-4141 $60.00 on Work from Home is now being considered a necessary Size7.1% Office Deal Vacancy planning. component of long-term planning. The sublease market has 6.6% $50.00 7.00%73.8 MSF 108,200 SF 6.3% 8.9%* grown from 1.4 MSF in Boston to over 2 MSF during COVID, $40.00 withThe moresubleaseto come .marketThe sublease has marketgrown hasfrom not yet1.4had MSF the *Availability6.00% rate is 11.4% expectedin Bostoneffect to over of lowering 2 MSFasking duringrents COVID-19,for direct space, with $30.00 adding a rent standoff amid an almost entirely stalled 5.00% more to come. The sublease market has not yet $20.00 marketplace. Tenants are looking to take advantage of had the expected effect of lowering asking rents for 4.00% 2015 2016 2017 2018 2019 YTD assumed asking rent decreases that landlords have thus far 2020 beendirectunwilling space,to addingdrop. a rent standoff amid an almost 2016 2017 2018 2019 YTD 2020 Class A Class B entirely stalled marketplace. Tenants are looking to take *Availability rate is 11.4% TOTALadvantage VACANCY of assumed asking rent decreases that AVERAGE ASKING RENTS landlords have thus far been unwilling to drop. AVERAGE ASKING RENTS 10.00% For more information, please contact: 8.9%* $80.00 WHAT9.00% THIS MEANS FOR TENANTS $70.00 • Look for the 3rd8.1% quarter to look similar to the 8.00% Neil$60.00 Schneider | [email protected] | 617-542-4141 exisglobal.com | [email protected] 2nd quarter;7.1% an increase in subleases coming online, lack of transaction6.6% velocity, and a $50.00 7.00% 6.3% continued freeze on asking rents from landlords. $40.00 6.00%We expect a slight increase in transaction velocity in the 4th quarter which should allow the landlord $30.00 5.00% asking rent (and thus achieving rent) to start to fall. $20.00 4.00% 2015 2016 2017 2018 2019 YTD 2020 2016 2017 2018 2019 YTD 2020 Class A Class B *Availability rate is 11.4%

100 Federal Street, Boston, MA 02110 I +1 617.542.4141 | mccallalmy.com

For more information, please contact:

Neil Schneider | [email protected] | 617-542-4141 exisglobal.com | [email protected] • Apart from plug-and-play subleases, question to have a definitive answer until pre-built and quality second generation space 2021-2022, but both trends will weigh heavily on will be the first to lease. The uncertain future will any new office requirement. limit tenants and landlords from committing the necessary capital into building shell space. • Many downtown Boston companies are considering satellite offices in the suburbs (or a • The question on everyone’s mind is “Which will complete relocation), but we do not see this have a greater impact on space needs: Work from exploration turning into a new widespread trend. Home or Social Distancing?” We do not expect this

KEY LEASE TRANSACTIONS

TENANT BUILDING SUBMARKET TYPE SQUARE ADDRESS FOOTAGE Acadian Asset Management 260 Franklin Street Financial District Renewal 108,200

Pioneer Investments Financial District Renewal 99,000

Seyfarth Shaw 2 Seaport Lane Seaport Relocation 66,400

Vertex Pharmaceuticals One Harbor Street Seaport New Lease 65,000

DataDog 225 Franklin Street Financial District Expansion 63,000

Brown Rudnick Financial District Renewal 57,000

GID Financial District Renewal 47,000

Payette 290 Congress Street Seaport Renewal / Expansion 41,000

SNYK Financial District Sublease 37,000

Jones Day 100 High Street Financial District Renewal 36,000

John Dolan Rob Glor Michael Goodwin Garrett Larivee Lenny Owens +1 617.947.1793 +1 617.548.5986 +1 508.397.1095 +1 617.838.9050 +1 617.838.9191 [email protected] [email protected] [email protected] [email protected] [email protected]

Dave Richardson Neil Schneider +1 617.838.9343 +1 617.306.9216 [email protected] [email protected]

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100 Federal Street, Boston, MA 02110 I +1 617.542.4141 | mccallalmy.com