X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

BOSTON-It never hurts to ask. That, perhaps, is the thinking behind the boldest asking rent ever heard of in Downtown Boston, with Equity Office Properties peddling a block of space in its One Post Office Square tower at the magical $100 per sf mark.

While Equity did not return phone calls to discuss the matter, the rumor is sending shockwaves throughout the local leasing market, especially given Equity’s dominant position in Boston’s Financial District, where it owns approximately 25% of the available 31 million sf of Class A office space. Sources say the REIT has told anyone interested that they will have to shell out three figures per sf to tie up the space on floors 35 and 36. There are caveats to the deal, one being that the estimated 40,000 sf will not be available for 24 months. In any event, some observers say the $100 rate could soon become the norm, as is becoming the case on the West Coast.

“That’s where the market is headed,” says one broker familiar with the Equity option. The source would not predict whether Equity will achieve the rate, maintaining that will be a function of finding a company trying to hedge against open-ended increases. “People are having sticker shock as it is,” says the broker, who requested anonymity. The $100 per sf quote “is going to really make people nervous, and maybe that will [prompt] somebody to bite.”

Given the recent escalation in rents, such a defensive strategy might make sense, with Spaulding & Slye reporting that achieved rents hit $70 per sf by mid-year. Prior to the start of 2000, most prognosticators anticipated rents would reach the $60 per sf level this year, but a 1.5% vacancy rate and demand from an estimated 5.5 million sf of requirements has already sent the rate soaring well beyond that mark. A few doors down from One Post Office Square, for example, the Chiofaro Co. reportedly has a 20,000-sf chunk of space that has found a taker at $85 per sf for the second half of a 10-year lease term.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.