With rents up and vacancies down in Cambridge and Boston, the appeal of neighboring Watertown grows stronger for office users, investors, and multifamily developers. “It's a relief valve,” says Colliers EVP Jim Elcock. With office vacancy just under 10% and few new Class-A office buildings, many Class-B and B-plus assets are fully leased, he says. (Asking rents range from $27 to the low $30/SF, versus $45 to $57/SF in Cambridge's popular Kendall Square submarket.) Watertown's become a favored alternative to Cambridge with many of the same market drivers: good public transit, great highway access, and an emerging 18-hour-day character. (And fewer confused British university students showing up for class.)

Since the ‘80s, this town has been repurposing its expansive industrial and former military buildings, converting them into hip brick-and-beam space. While just down the Charles River from Harvard Square, Watertown used to feel remote. But since Harvard University purchased the 11-building, 760k SF Arsenal on the Charles (above) 15 years ago, it's acquired an Ivy League aura that validated Watertown as a business address. By '05, the completion of the Big Dig transportation network brought it within a 15-minute drive to Logan Airport (assuming no traffic). Read more about what's happening in this hot area in Real Estate Bisnow Boston.