In some respects, it is a good thing that the Massachusetts Institute of Technology is located in Cambridge. With office rents in the city continuing to rise exponentially, it may soon take a mathematical wizard or two to quantify the numbers accurately.

“At current rates, premier property rates in Cambridge will soon exceed $70 per sf,” says Darryl Morse, director of the Boston office of Insignia/ESG. According to figures released this week by his firm, the average price for class A office space in Cambridge is now $51.49 per sf, up dramatically from the $34.21 per sf average posted at the mid-year mark. Top-tier properties are already signing deals in the $60 per sf range with no signs of slowing down.

Ted Wheatley, a principal with the Codman Co., agrees that Cambridge has come a long way from the early 1980s, when most commercial space was comprised of aging industrial buildings and retail supporting Harvard and MIT. Largely because of those famous schools, which have spun off a number of internationally known high-tech and biotech companies, demand for office space is as crisp there today as anywhere in the country.

“The Cambridge market is fully matured, and rent levels will be on a par with Boston from here on out,” says Wheatley. “Biotech and high-tech absolutely dominate and drive Cambridge the same way financial services drive the market in Downtown Boston.”In recent months, for example, companies such as Biogen, Amgen and Genzyme have announced major expansion plans in Cambridge, with Genzyme earlier this month acknowledging it will build a 350,000-sf corporate campus at the site of a former gas plant. Millennium Pharmaceuticals made a similar-sized commitment as well, with plans to lease 400,000 sf in several new buildings at the University Park at MIT mixed-use complex in Central Square.

“Pre-leasing, build-to-suit and purchase of approved land sites by owner/occupants have all led to substantial transactions and leasing activity in Cambridge,” says Morse. “Failing such measures, certain tenants will be forced to explore alternative locations outside the city until more space becomes available.”

Indeed, Insignia estimates that the vacancy rate for the 12 million-sf market is just 0.21% at the end of the third quarter. With less than 200,000 sf of existing space expected to roll during the next few months, Morse says the vacancies will struggle to increase significantly in the near term.

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