Financial District's Big Bounce

Listen to these numbers exclusive to Bisnow: the Financial District vacancy rate could plummet to 10.7% by year-end, from 16% a year earlier. That's if all the companies planning to take space—like Paris-based engineers Technip— actually move in, according to JLL.
“The Financial District is two restaurants away from a big rebound,” says JLL managing director Bill Barrack. (Our belt size is the same way.) Restaurants and retail are opening to serve tenants filling up office towers. At One Financial Center (above),Technip has leased 38k SF (a relo from East Cambridge); at One Federal Street, Iron Mountain will take 129k SF, landlord Tishman Speyer announced today. Lafayette City Center and 50 Post Office Square also are on track to welcome several new tenants in coming weeks. The Financial District, once downtown’s dominant office submarket, closed Q3 with 13.3% vacancy, the highest in the city. But as space is leased in the Back Bay, Seaport and Cambridge, and rents rise, the Financial District is getting the spillover for what it offers now and has on the way.
Several thousand luxury residences are in development, joined by amenities for the good life: eateries, hotels, recreation. At 99 High, the owner of Les Zygomates, Ian Just, is having a new venue built out, Society on High, which is scheduled to open in early ’13. Another major driver is job growth, says JLL research manager Lori Mabardi. Metro Boston life science and tech sectors have created 14,000 new jobs in the past two years. Since eBay signed up for offices at International Place, demand for the Financial District among the tech set has been rising. “It’s hit an inflection point,” Lori says. Things there will get better quickly, she forecasts.

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