Though the technology sector might be the heart of today’s office leasing activity, in Boston the life sciences sector is the life blood, as the city’s market attracted eight of the industry’s top 10 firms and is currently experiencing an average vacancy rate of only 5.5 percent.
Life science companies leased almost 2 million sq. ft. in Boston and Cambridge markets in 2015, increasing activity by more than 160 percent from a year prior, according to a recent “bioSTATus” report from real estate services firm Transwestern. The demand is so high that the East Cambridge sub-market now has an availability rate of a less than 1 percent.
Further, the market is attracting bigger names outside of the bioscience sector. Microsoft and Google have each set up a major presence in the region. General Electric Co. is moving its headquarters from Farfield, Conn. to the Boston Seaport District, thanks in part to $145 million in state and local incentives.
GE’s decision, along with new move-ins by drug companies such as Selvita, show the region is becoming an epicenter of the new global life sciences/technology economy, says Mark Stewart, senior vice president and branch manager in the Boston office of real estate services firm Savills Studley.
“It’s just extremely tight, especially in the Cambridge area,” Stewart notes. “There’s just barely any availability for lab space, or the office that goes along with it. There’s a strong inflow of companies and growth, with over 75 percent of new construction already pre-leased...”Boston Benefits from Strong Demand from Life Science Tenants
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National Office Sector Report (Q4 2015)