Is office supply finally catching up with demand in Boston? Not yet, Lendlease SVP and principal in charge of the Boston construction business John Pignataro tells us, but supply growth is having an impact on the market.
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John tells us the Boston office market is still improving, with vacancy rates coming down from the most recent peak. The pace of rental growth has increased significantly from 2012 and will continue to grow, although at a slightly slower pace over the next few years. Consequently office vacancies continue to trend downward despite new office stock coming online.
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John says in the near term, the office pipeline will be slightly stronger than historic averages, with the annual supply averaging more than 600k SF. Tenants don't want just any kind of space, however. One of the key submarkets fueling this growth is the tech sector, in a pattern that's unlikely to change in the next few years.
Notable recent local projects for Lendlease include the Bristol-Myers Squibb - North America Biologics Center of Excellence expansion in Devens and the construction of Zinc, a 392-unit luxury multifamily property in Cambridge.
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