Even if a business can find a large block of high-rise space, tenants are due for some sticker shock. Rents, Fitzgerald said, are on the rise. At International Place, space that not too long ago leased for $40 per sf is now going for $45 to $50 per sf.
"If you want to be in quality space you're going to have to pay the price," said Bob Richards, president of Richards Barry Joyce & Partners, who spoke on a leasing panel. Also on the panel with Richards and Fitzgerald were Duncan Gratton, managing director of Equity Office Properties, Jay Doherty, president of Cabot, Cabot and Forbes, and Jack Kerrigan, executive vice president of Grubb & Ellis.
Panel experts said low-rise space is also on the move. At 101 Federal St., recent leases took 100,000 sf off the market, all below the 11th floor, Gratton said. "Last year, that building was struggling."
Even Cambridge is feeling the pinch since biotech moved into the playing field, says Richards. Rising office rents could price some tenants out of the market forcing them into the suburbs. Gratton cautioned that "once a tenant gets priced out of the market, they don't ever come back."
Yet even in the suburbs, leasing can be tricky. "It's very, very spotty," Kerrigan said of Boston's suburban market. Waltham's market remains hot with 15% vacancy yet there is an enormous amount of inventory remains to be leased. Meanwhile in Littleton, Kerrigan said, one out of three buildings is empty. But in Boston and Cambridge, the tightening market is making owners smile. The bigger demand, after all, can only mean higher rent rates, panel members noted.
The event, which drew about 400 real estate professionals from throughout the area, also featured keynote speaker Janet Marie Smith, the senior vice president of planning and development for the Boston Red Sox. Thomas Alperin, partner and president of National Development, was in the hot seat at the popular "Inside the Real Estate Mind" segment. He sat down with Real Estate Media Network editor-in-chief Michael G. Desiato. The RealShare conference series is produced by Real Estate Media, publisher of Real Estate Forum and GlobeSt.com.
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