Vertex’s move to the South Boston Waterfront is merely an aberration and does not signify a trend of life science companies preparing to move to the area, according to 70 percent of attendees at Colliers International’s annual market report last night.
Those hundreds of commercial real estate brokers, developers, financial analysts and architects believe Vertex’s move from Cambridge to Boston is an anomaly – not an affirmation of the Seaport as the new life sciences destination.
That could be especially true as Vertex prepares to vacate 660,000 square feet of Class A East Cambridge lab and office space that is not yet spoken for. Combined with several other large users that will not be re-signing leases in the area in the next two to three years, Cambridge rents are likely to soften, according to Joseph Flaherty, Colliers executive vice president.
And those softening rents are likely to attract tenants, while Seaport lab space remains largely nonexistent.
"The [South Boston] Innovation District has no lab space to speak of yet," Flaherty opined during his presentation on the Cambridge market.
Audience members at the presentation were posed with questions about Vertex, the Filene’s site in Downtown Crossing and casino gambling, and were told to answer via text message.
Sixty-five percent said a casino is more likely at Suffolk Downs than in Foxborough. And more than 80 percent responded that they think there will be no construction activity at the botched Filene’s development site this year.
Despite that, Colliers President Ron Perry predicted positive office absorption in the range of 750,000 square feet this year. Such activity would follow positive net absorption of 600,000 square feet in Boston in 2011 – the first year of positive absorption after three straight years of negative absorption.
Perry’s five-year Boston office forecast has vacancy rates, now at about 15.8 percent, falling to the 10 to 12 percent range with positive absorption of between 500,000 and a million square feet each year.
In the suburbs, the biggest story – as first reported by Banker & Tradesman – is TJX Cos.’ hunt for 1.3 million square feet. The company’s current 850,000-square-foot lease in Framingham expires in 2016. While conventional wisdom suggests a renewal will likely be part of the deal, the company is looking at space along Interstate 495 and could potentially split the requirement, according to James Elcock, executive vice president for suburban brokerage at Colliers.
Other large requirements include Reading-based coffeemaker manufacturer Keurig looking for half a million square feet, preferably in a campus setting with manufacturing and high-end corporate space along Route 128 or 495. And Converse, based in Andover, is in the market for 150,000 square feet. The sneaker maker has looked in the suburbs and in the Seaport area for space.
Colliers is not expecting much speculative development this year. However, Boston Properties’ 10 and 20 CityPoint project in Waltham is building momentum with prospective tenants like Microsoft, Constant Contact and Biogen Idec considering consolidating their offices at the property.
According to Boston Properties’ website, the CityPoint project is a complete redevelopment of a site currently home to three, 35-year-old buildings that will be demolished. When built, the 450,000-square-foot, mixed-use development will contain approximately 400,000 square feet of office space across two six-story buildings and 50,000 square feet of retail shops and restaurants.
