Market Report | Office | August 2023

Quincy/Braintree Office

Vacancy in the Quincy/Braintree office submarket is 11.6% and has increased by 0.3% over the past 12

months. Meanwhile, the rate of increase in the broader Boston market was 1.4%.

During this period, there has been 24,000 SF of negative absorption, and 8,200 SF has been delivered. Total availability, which includes sublease space, is 16.3% of all inventory. Space rated 3 Star is the most dominant subtype, with 5.2 million SF in this category. There is 3.6 million SF of 4 & 5 Star space, and 2.1 million SF of 1 & 2 Star space. Rents are around $30.00/SF, which is a 0.6% increase from where they were a year ago. In the past three years, rents have increased a cumulative 9.1%. This is also a very affordable submarket, relative to Boston as a whole, where average rents are $42.00/SF. While there is nothing under construction, there has been some recent activity. Around 69,000 SF of net deliveries have been brought online in the past three years. In the past 12 months, 12 sales have taken place. Sales have averaged $128/SF, and the estimated value for the submarket as a whole is $259/SF. The most frequent of these transactions have been those of 1 & 2 Star space, which is not the largest subtype in the Quincy/Braintree submarket, with 9 sales of this space type. Over the past three years, there have been 46 sales, which have traded for approximately $128 million. The market cap rate for Quincy/Braintree is 6.9%, slightly above its trailing three-year average of 6.6%.

Route 3 South Office

Vacancy in the Route 3 South office submarket is 4.4%, which is the same level it was 12 months ago.

Meanwhile, the rate of increase in the broader Boston market was 1.4%. During this period, 5,900 SF has been absorbed, and 3,900 SF has delivered. Total availability, which includes sublease space, is 7.1% of all inventory. Space rated 3 Star is the most dominant subtype, with 3.4 million SF in this category. There is 2.4 million SF of 1 & 2 Star space and 170,000 SF of 4 & 5 Star space. Rents are around $24.00/SF, which is a 0.9% increase from where they were a year ago. In the past three years, rents have increased a cumulative 10.5%. This is also a very affordable submarket, relative to Boston as a whole, where average rents are $42.00/SF. About 3,000 SF is under construction, representing a minimal 0.1% expansion of inventory. Moreover, total inventory is 17,000 SF larger than it was three years ago. In the past 12 months, 28 sales have taken place. Sales have averaged $141/SF, and the estimated value

for the submarket as a whole is $169/SF. The most frequent of these transactions have been those of 1 & 2 Star space, which is not the largest subtype in the Route 3 South submarket, with 16 sales of this space

type. Over the past three years, there have been 86 sales, which have traded for approximately $62.3 million. The market cap rate for Route 3 South is 7.9%, moderately above its trailing three-year average of 7.4%.