Strong total absorption across market

Third quarter absorption eclipsed 1.2 million square feet, bringing year-
to-date levels to multi-year highs (2.5 million square feet in total
absorption). What is particularly interesting about these levels is that
they are equally spread between the CBD and the Suburbs (Particularly
the Fortress markets128/MP). Cambridge saw the lowest level of
absorption this quarter because of the dwindling availability. Cambridge
demand well outpaces available options and thus, average asking rents
continued to rise at 2.0 percent over the quarter and 7.9 percent year-
over-year as landlords maintain a bullish outlook.
Average asking rents, by region
Source: JLL Research
Sales activity: buyer composition evolving
Foreign investors continue to have an eye for Bostons CBD.
Oxford Properties closed on their five-asset portfolio and already
have 100 High under agreement to CBRE Investors. Norges Bank
made a splash in the CBD as they announced that they will own 45
percent of Atlantic Wharf and 100 Federal with Boston Properties.
This follows their purchase of One Beacon Street with MetLife, in
July. In the Fortress markets (Burlington/Waltham), well-leased
properties garnered a lot of attention this quarter by local buyers,
and value-add sales took place along the Route 3/495 corridor.
Buyer composition, Greater Boston
Source: JLL Research, RCA
Development activity: The renovation story counts too
JLL is tracking nine projects underway, totaling 2.3 million square
feet in new construction, and just two of those projects are
speculative (in Cambridge and Burlington) and are on the smaller
side. But the renovation pipeline tells a different story. Of the seven
projects accounting for 1.1 million square feet of buildings we are
tracking that are undergoing significant renovations, six are
repositioning their building on a speculative basis. When we merge
the new and renovation story, just 55.5 percent of space is
preleased, indicating that speculative development is here, but
hiding within existing shells.
Number of BTS vs. speculative projects

Source: JLL Research
14.9%
Total vacancy
2,549,446
YTD net absorption (s.f.)
1,153,447
Q3 2014 net absorption (s.f.)
7.9%
12-month rent growth
2,249,949
Total under construction (s.f.)
76.2%
Total preleased
Office Insight
Boston | Q3 2014
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
CBD Cambridge Suburbs
7
1
2
6
0
5
10
New development Rehab/renovation
BTS Speculative
0%
20%
40%
60%
80%
100%
2013 2014 (YTD)
Institutional
Cross-Border
Public Listed/REITs
Private
User/Other
Total net absorption (s.f.), Greater Boston
Source: JLL Research
Total vacancy rate, Greater Boston
Source: JLL Research
Direct average asking rent ($ p.s.f.), Greater Boston
Source: JLL Research
For more information, contact:
William Barrack
+1 617 531 4135
William.Barrack@am.jll.com
2014 Jones Lang LaSalle IP, Inc. All rights reserved. No part of this
publication may be reproduced by any means, whether graphically,
electronically, mechanically or otherwise howsoever, including without
limitation photocopying and recording on magnetic tape, or included in any
information store and/or retrieval system without prior written permission
of Jones Lang LaSalle. The information contained in this document has
been compiled from sources believed to be reliable. Jones Lang LaSalle
or any of their affiliates accept no liability or responsibility for the accuracy
or completeness of the information contained herein and no reliance
should be placed on the information contained in this document.
4,421,756
3,437,213
4,456,717
-3,966,260
539,930
1,058,638
2,666,152
14,890
2,549,446
-6,000,000
-4,000,000
-2,000,000
0
2,000,000
4,000,000
6,000,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 YTD 2014
$24.31
$25.81
$29.39
$30.44
$25.77
$26.74 $27.09 $26.85
$28.41
$30.69
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
17.8%
16.0%
14.0%
14.5%
17.6%
18.1% 18.1%
15.9%
16.1%
14.9%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014