By Aaron Jodka | June 2018
A typical market offers a variety of options for tenants seeking space, be they small or large. That isn’t the case today for one segment of the market: large users needing 200,000 SF or more. Looking at the city of Boston’s overall vacancy, 9.6% at the end of the first quarter, wouldn’t necessarily lead one to that conclusion. After all, vacancies are only 1.2 percentage points below their long-term average.
But big blocks of space in existing assets are practically nonexistent: 100 Summer can accommodate a large user tenant with Nixon Peabody relocating to 53 State Street, and 601 Congress can as well once Manulife has consolidated staff to the Back Bay. Several options exist for tenants looking for 100,000 SF of space, but even then, they’d need to get creative in some instances by combining direct and sublease space to contain a big enough block.
So what’s a large tenant to do? In the near term there isn’t much relief in sight. Projects under construction are well leased, removing them from the list of opportunities. A couple of speculative projects due to kick off in the coming weeks and months could each handle a 200,000 SF tenant. A late 2019 delivery may be possible. Bigger than that, though? Tenants would need to anchor one of the myriad development projects throughout the city. With a still-strong pipeline of tenants looking in Boston—and the potential today for rapid expansion of major tech firms with small footprints—some skyline-altering development in the Financial District or Back Bay might be just around the corner.