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BostonSkyGuy
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vanshnookenraggen said:
? I missed it, what happened?
Why are office towers on the rise again in Boston?
- Thread starter KentXie
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? I missed it, what happened?
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BostonSkyGuy said:
Long story short, there was a large penis dressed as a super villan destroying a city.
awood91
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On cruise control
Conditions ripe as Hub office market sees rent, space rise
By Andrew Caffrey, Globe Staff | March 3, 2007
The Boston office market is cruising.
Rents are rising quickly, buildings are continuing to sell rapidly for near-record amounts, large office spaces are in short supply, and at least one developer is taking the ultimate risk by starting a building without an anchor tenant.
"Right now, if you're a landlord you don't need to be too concerned -- all the indicators are going in your direction," said William Barrack, managing director of commercial brokerage Jones Lang LaSalle.
The most anticipated deal in the Boston market was Ropes & Gray LLP's decision to move from One International Place to the Prudential tower in 2010, taking up nearly one-third of the Back Bay landmark. Ropes & Gray had been one of the few megatenants still in the market for huge chunks of space -- its deal is for around 400,000 square feet.
Ropes & Gray and the Pru's owner, Boston Properties Inc., won't disclose details of the pending deal. While average rents in class A office space had been in the mid- to upper-$40s a square foot, Barrack and others said prices for better spaces are escalating rapidly.
Cesar Pelli?s tower above South Station. (Rendering/Payne Rowlett Photo)
"We've seen an increase in rents of $10 to $15 in the last 60 days," Barrack said.
Indeed, when he first started plotting out his mega development on Fan Pier a year ago, developer Joseph Fallon thought rents for new, premium office space would be in the $60-a-square-foot range. Now, Fallon said, existing buildings are starting to draw that much, meaning new properties such as his could command much more.
Fallon and others noted that leases on large blocs of office space for good-sized clients are expiring in the next few years -- as much as five million square feet of office space by his estimate.
The 2009-2011 period appears to be the height at which many of those tenants will be needing new space, or renewing existing locations but likely at much higher rates.
Many of those are tenants looking for 100,000 square feet or so, brokers said.
Conditions are so ripe for owners that Fallon recently decided to begin construction later this year on a 500,000-square-foot office building along the South Boston Waterfront without an anchor tenant. He will also build two other buildings, a hotel-condominium property, and a separate condo project at the same time.
Since his decision to proceed, Fallon said his company has received enough "interest" in the Fan Pier building that he predicts it will have "more than one tenant lined up" by the third quarter of this year.
Fallon certainly has a unique property to sell: one of the few buildings expected to get underway in Boston, positioned right on the water in the city's most dynamic new district, and designed with large floor plates for tenants who want to bunch operations on a single level.
Several of the other major buildings being planned in Boston also have singular attributes: an elegant skyscraper designed by architect Cesar Pelli is planned above South Station that includes more than 1 million square feet of office space; views of both the water and the Rose Fitzgerald Kennedy Greenway park system from proposed Russia Wharf office space, where nearby the trendy Intercontinental Hotel and condo building is open.
Other buildings in the works include the striking 1,000-foot tower proposed by businessman Steve Belkin and redevelopment of the Filene's block in Downtown Crossing, where developer John Hynes and partner Vornado Realty Trust are proposing a 1.25-million-square-foot mixed use project. Hynes is planning office space for about one-third of the 7 million square feet of development he has planned for property he owns in the Seaport District near Fallon's Fan Pier.
Meantime, some existing buildings retain their allure. Ropes & Gray's current digs at One International Place has great views, Boston Properties is expecting to spend millions upgrading the Pru, and has another office building planned nearby in Back Bay, a part of the city that has attracted many tenants because of its rich base of restaurants, amenities, and proximity to transportation.
Barrack, for one, wonders how much longer rents can continue to move up at these rates. He also cautioned against a classic rush to build because market conditions now look so good. "The danger we've got to be careful of," Barrack said, "is the market tells us we need to build two buildings and we build five."
Conditions ripe as Hub office market sees rent, space rise
By Andrew Caffrey, Globe Staff | March 3, 2007
The Boston office market is cruising.
Rents are rising quickly, buildings are continuing to sell rapidly for near-record amounts, large office spaces are in short supply, and at least one developer is taking the ultimate risk by starting a building without an anchor tenant.
"Right now, if you're a landlord you don't need to be too concerned -- all the indicators are going in your direction," said William Barrack, managing director of commercial brokerage Jones Lang LaSalle.
The most anticipated deal in the Boston market was Ropes & Gray LLP's decision to move from One International Place to the Prudential tower in 2010, taking up nearly one-third of the Back Bay landmark. Ropes & Gray had been one of the few megatenants still in the market for huge chunks of space -- its deal is for around 400,000 square feet.
Ropes & Gray and the Pru's owner, Boston Properties Inc., won't disclose details of the pending deal. While average rents in class A office space had been in the mid- to upper-$40s a square foot, Barrack and others said prices for better spaces are escalating rapidly.
Cesar Pelli?s tower above South Station. (Rendering/Payne Rowlett Photo)
"We've seen an increase in rents of $10 to $15 in the last 60 days," Barrack said.
Indeed, when he first started plotting out his mega development on Fan Pier a year ago, developer Joseph Fallon thought rents for new, premium office space would be in the $60-a-square-foot range. Now, Fallon said, existing buildings are starting to draw that much, meaning new properties such as his could command much more.
Fallon and others noted that leases on large blocs of office space for good-sized clients are expiring in the next few years -- as much as five million square feet of office space by his estimate.
The 2009-2011 period appears to be the height at which many of those tenants will be needing new space, or renewing existing locations but likely at much higher rates.
Many of those are tenants looking for 100,000 square feet or so, brokers said.
Conditions are so ripe for owners that Fallon recently decided to begin construction later this year on a 500,000-square-foot office building along the South Boston Waterfront without an anchor tenant. He will also build two other buildings, a hotel-condominium property, and a separate condo project at the same time.
Since his decision to proceed, Fallon said his company has received enough "interest" in the Fan Pier building that he predicts it will have "more than one tenant lined up" by the third quarter of this year.
Fallon certainly has a unique property to sell: one of the few buildings expected to get underway in Boston, positioned right on the water in the city's most dynamic new district, and designed with large floor plates for tenants who want to bunch operations on a single level.
Several of the other major buildings being planned in Boston also have singular attributes: an elegant skyscraper designed by architect Cesar Pelli is planned above South Station that includes more than 1 million square feet of office space; views of both the water and the Rose Fitzgerald Kennedy Greenway park system from proposed Russia Wharf office space, where nearby the trendy Intercontinental Hotel and condo building is open.
Other buildings in the works include the striking 1,000-foot tower proposed by businessman Steve Belkin and redevelopment of the Filene's block in Downtown Crossing, where developer John Hynes and partner Vornado Realty Trust are proposing a 1.25-million-square-foot mixed use project. Hynes is planning office space for about one-third of the 7 million square feet of development he has planned for property he owns in the Seaport District near Fallon's Fan Pier.
Meantime, some existing buildings retain their allure. Ropes & Gray's current digs at One International Place has great views, Boston Properties is expecting to spend millions upgrading the Pru, and has another office building planned nearby in Back Bay, a part of the city that has attracted many tenants because of its rich base of restaurants, amenities, and proximity to transportation.
Barrack, for one, wonders how much longer rents can continue to move up at these rates. He also cautioned against a classic rush to build because market conditions now look so good. "The danger we've got to be careful of," Barrack said, "is the market tells us we need to build two buildings and we build five."
Home > Business Today > Women's Business
E-mail Printable Popular del.icio.us
Robust Conditions Continue in Boston Market
By Debra Gould/ Real Estate
Sunday, April 1, 2007
Last year?s dynamic Boston office market ? highlighted by a red hot investment sales market and strong leasing demand ? ought to spark a robust 2007 environment, one marked by escalating rents, tight market conditions and new development opportunities.
With four consecutive years of positive net absorption, market conditions in Boston?s class A market continue to tighten and lead the overall office market recovery in Boston. Over 2006, tenants in the class A market absorbed a net of nearly half a million square feet.
As a result, the availability rate fell to 12.4 percent, approximately two percentage points less than year-end 2005. Meanwhile, the vacancy rate remained in the single digits at 5.6 percent.
A lack of large blocks of premium class A space continues to impact leasing decisions for both tenants and landlords. The remaining handful of available blocks of 100,000 square feet or more are expected to be absorbed quickly as a lack of new construction puts considerable strain on supply.
The strong market fundamentals prevalent over the last few years have attracted a tremendous amount of capital to the city, and many of Boston?s trophy properties have changed hands.
Overall, the Greater Boston region recorded approximately $9 billion in investment sales transactions, 73 percent of which were located in downtown Boston.
Now that the Blackstone Group has acquired Equity Office Properties, all eyes will be on Boston and the 14 downtown properties included in the portfolio. Looking at other cities impacted by the EOP purchase such as New York, Portland and Washington, D.C., it?s safe to assume that Boston?s skyline will see major ownership changes over the next year.
Tenants will feel these ownership changes, impacted by record low cap rates and a lack of supply in the form of higher rents. The average asking rent in the tower market has increased approximately 24 percent over the last year to $47.50 per square foot gross.
Likewise, tightening conditions on upper floors have motivated landlords to increase asking rates for high-rise space to an average of $51.50 per square foot gross. This trend is expected to continue with some landlords quoting $67 to $80 per square foot gross for premium tower view space.
Class B landlords are also benefiting from these frothy conditions and are experiencing an increase in demand from tenants priced out of the premium towers. Consequently, class B landlords pushed asking rents to an average of $31 per square foot gross, a 17.5-percent increase over last year.
As competition heats up among some of the larger tenants and investors strive to meet return on investment goals, landlords are expected to aim high and push the envelope with asking rents.
These forces will undoubtedly open the door to new development. With several large leases rolling over the next few years and rents approaching replacement costs, a new tower is expected to be under construction during 2007. [continue]
http://business.bostonherald.com/womensBusiness/view.bg?articleid=191427
E-mail Printable Popular del.icio.us
Robust Conditions Continue in Boston Market
By Debra Gould/ Real Estate
Sunday, April 1, 2007
Last year?s dynamic Boston office market ? highlighted by a red hot investment sales market and strong leasing demand ? ought to spark a robust 2007 environment, one marked by escalating rents, tight market conditions and new development opportunities.
With four consecutive years of positive net absorption, market conditions in Boston?s class A market continue to tighten and lead the overall office market recovery in Boston. Over 2006, tenants in the class A market absorbed a net of nearly half a million square feet.
As a result, the availability rate fell to 12.4 percent, approximately two percentage points less than year-end 2005. Meanwhile, the vacancy rate remained in the single digits at 5.6 percent.
A lack of large blocks of premium class A space continues to impact leasing decisions for both tenants and landlords. The remaining handful of available blocks of 100,000 square feet or more are expected to be absorbed quickly as a lack of new construction puts considerable strain on supply.
The strong market fundamentals prevalent over the last few years have attracted a tremendous amount of capital to the city, and many of Boston?s trophy properties have changed hands.
Overall, the Greater Boston region recorded approximately $9 billion in investment sales transactions, 73 percent of which were located in downtown Boston.
Now that the Blackstone Group has acquired Equity Office Properties, all eyes will be on Boston and the 14 downtown properties included in the portfolio. Looking at other cities impacted by the EOP purchase such as New York, Portland and Washington, D.C., it?s safe to assume that Boston?s skyline will see major ownership changes over the next year.
Tenants will feel these ownership changes, impacted by record low cap rates and a lack of supply in the form of higher rents. The average asking rent in the tower market has increased approximately 24 percent over the last year to $47.50 per square foot gross.
Likewise, tightening conditions on upper floors have motivated landlords to increase asking rates for high-rise space to an average of $51.50 per square foot gross. This trend is expected to continue with some landlords quoting $67 to $80 per square foot gross for premium tower view space.
Class B landlords are also benefiting from these frothy conditions and are experiencing an increase in demand from tenants priced out of the premium towers. Consequently, class B landlords pushed asking rents to an average of $31 per square foot gross, a 17.5-percent increase over last year.
As competition heats up among some of the larger tenants and investors strive to meet return on investment goals, landlords are expected to aim high and push the envelope with asking rents.
These forces will undoubtedly open the door to new development. With several large leases rolling over the next few years and rents approaching replacement costs, a new tower is expected to be under construction during 2007. [continue]
http://business.bostonherald.com/womensBusiness/view.bg?articleid=191427
I
IMAngry
Guest
I know nothing about this ....
I know nothing about commercial real estate, but I have to say I'm amazed at the purchase prices of buildings, these days.
My guess? There's just too much money out there floating around. Investors can't find enough places to put it, so they are willing to accept returns less than ideal (when the article above below talks about "cap rate", that's the return on investment, and these are really low, right now).
Where are investors going to be able to put their money next? Stocks, bonds, venture cap, real estate?
What's left that hasn't bubbled?
I know nothing about commercial real estate, but I have to say I'm amazed at the purchase prices of buildings, these days.
My guess? There's just too much money out there floating around. Investors can't find enough places to put it, so they are willing to accept returns less than ideal (when the article above below talks about "cap rate", that's the return on investment, and these are really low, right now).
Where are investors going to be able to put their money next? Stocks, bonds, venture cap, real estate?
What's left that hasn't bubbled?
Re: I know nothing about this ....
You are correct to assume that. Interest rates are extremely low and the resulting yields on bonds are low, so investors aren't putting money in the bond market. Return expectations for stocks have also dwindled and probably will be on the low side. Real estate has enjoyed a prolonged run-up because there is record liquidity in the market - a lot of money chasing few properties. As long as there is liquidity, I don't see an end to the real estate miracle.
IMAngry said:
You are correct to assume that. Interest rates are extremely low and the resulting yields on bonds are low, so investors aren't putting money in the bond market. Return expectations for stocks have also dwindled and probably will be on the low side. Real estate has enjoyed a prolonged run-up because there is record liquidity in the market - a lot of money chasing few properties. As long as there is liquidity, I don't see an end to the real estate miracle.
not sure if it's worth dredging up an old thread for this or not... but I found it amusing and the Tommie's Tower thread is closed.
http://dollardaze.org/blog/?post_id=00524
http://dollardaze.org/blog/?post_id=00524
At least Boston isnt bad as some other places take Atlanta for example.
Friday, April 16, 2010
Empty office space sets record
Atlanta Business Chronicle - by Douglas Sams Staff Writer
Metro Atlanta has broken a new record for empty office space, a first even for a region whose developers are famous for overbuilding.
The amount of available office space stands at 39.3 million square feet, according to the real estate brokerage Colliers International. The figure eclipses the old benchmark of 35.4 million square feet in 2003, a glut that developed in the rebound from the dot-com crash.
Metro Atlanta has the equivalent of 33 Bank of America Plaza towers (which, at 55 stories, is the tallest building in Georgia) standing empty. It could take almost a decade to absorb enough office space to get the supply back to normal.
The excess is the result of easy credit from 2005 to 2007 that fueled a speculative office building boom, especially in Buckhead and Midtown, where several towers were under construction at once. Then, the worst recession in 80 years robbed developers of the job growth needed to fill all those buildings.
As job losses have mounted in the past year and corporate downsizing has become commonplace, the vacancy rate for metro Atlanta office buildings has soared to 22.2 percent, equal to the highest on record, first reported at the start of 2003, according to brokerage firm Jones Lang LaSalle Inc.
The vacancy rate is based on a metro Atlanta inventory of office buildings that approaches 139 million square feet, Jones Lang LaSalle said.
The vacancy rate has not exceeded record levels yet, in part, because not all of the empty offices are technically ?vacant.?
Companies are holding onto empty floors because they don?t think it?s worth putting them on the market for lease. There isn?t enough demand.
It will take at least eight years to absorb enough vacant office space to get metro Atlanta back to 14 percent vacancy, or about the point when developers historically have broken ground on new speculative towers, said Lanie Rea, research manager for Jones Lang LaSalle.
For one of the rare times in its history of boom times, speculative office development in the Capital of the New South has come to a halt.
?The city has zero speculative space,? said Bob Stoner, regional vice president of Eola Capital, which owns the most office real estate in Atlanta. ?We may go three or four years before we see another spec development.?
Huge chunks of space
The current excess has brought about the return of ?see-through buildings,? symbols of the 1990s real estate glut.
Owners of the most recognizable office towers on the Atlanta skyline are dealing with huge chunks of empty space.
In Midtown, BentleyForbes Group LLC has about 334,000 square feet to fill at Bank of America Plaza.
Hines needs tenants for about 388,000 square feet at One Atlantic Center.
American International Group has about 282,000 square feet of empty space at its 271 17th Street Building, also known as the BB&T tower.
On the Perimeter, Rubenstein Partners and Barry Real Estate Companies Inc. have 363,000 square feet to fill, primarily because anchor tenant Royal Philips Electronics moved to Alpharetta.
The office market around Sandy Springs and Perimeter Mall ? Atlanta?s largest ? has 5.9 million square fee of empty space, according to Colliers International.
In Buckhead, where overdevelopment has created one of the most competitive office markets in the U.S., 4.9 million square feet is empty. In northwest Atlanta, home to Cobb Galleria Centre, about 6.2 million square feet is empty.
The roots of the current glut stem from several sources, including the lax underwriting standards of the middle decade and the belief that commercial real estate prices would continue climbing.
http://atlanta.bizjournals.com/atlanta/stories/2010/04/19/story5.html?b=1271649600^3201151
Friday, April 16, 2010
Empty office space sets record
Atlanta Business Chronicle - by Douglas Sams Staff Writer
Metro Atlanta has broken a new record for empty office space, a first even for a region whose developers are famous for overbuilding.
The amount of available office space stands at 39.3 million square feet, according to the real estate brokerage Colliers International. The figure eclipses the old benchmark of 35.4 million square feet in 2003, a glut that developed in the rebound from the dot-com crash.
Metro Atlanta has the equivalent of 33 Bank of America Plaza towers (which, at 55 stories, is the tallest building in Georgia) standing empty. It could take almost a decade to absorb enough office space to get the supply back to normal.
The excess is the result of easy credit from 2005 to 2007 that fueled a speculative office building boom, especially in Buckhead and Midtown, where several towers were under construction at once. Then, the worst recession in 80 years robbed developers of the job growth needed to fill all those buildings.
As job losses have mounted in the past year and corporate downsizing has become commonplace, the vacancy rate for metro Atlanta office buildings has soared to 22.2 percent, equal to the highest on record, first reported at the start of 2003, according to brokerage firm Jones Lang LaSalle Inc.
The vacancy rate is based on a metro Atlanta inventory of office buildings that approaches 139 million square feet, Jones Lang LaSalle said.
The vacancy rate has not exceeded record levels yet, in part, because not all of the empty offices are technically ?vacant.?
Companies are holding onto empty floors because they don?t think it?s worth putting them on the market for lease. There isn?t enough demand.
It will take at least eight years to absorb enough vacant office space to get metro Atlanta back to 14 percent vacancy, or about the point when developers historically have broken ground on new speculative towers, said Lanie Rea, research manager for Jones Lang LaSalle.
For one of the rare times in its history of boom times, speculative office development in the Capital of the New South has come to a halt.
?The city has zero speculative space,? said Bob Stoner, regional vice president of Eola Capital, which owns the most office real estate in Atlanta. ?We may go three or four years before we see another spec development.?
Huge chunks of space
The current excess has brought about the return of ?see-through buildings,? symbols of the 1990s real estate glut.
Owners of the most recognizable office towers on the Atlanta skyline are dealing with huge chunks of empty space.
In Midtown, BentleyForbes Group LLC has about 334,000 square feet to fill at Bank of America Plaza.
Hines needs tenants for about 388,000 square feet at One Atlantic Center.
American International Group has about 282,000 square feet of empty space at its 271 17th Street Building, also known as the BB&T tower.
On the Perimeter, Rubenstein Partners and Barry Real Estate Companies Inc. have 363,000 square feet to fill, primarily because anchor tenant Royal Philips Electronics moved to Alpharetta.
The office market around Sandy Springs and Perimeter Mall ? Atlanta?s largest ? has 5.9 million square fee of empty space, according to Colliers International.
In Buckhead, where overdevelopment has created one of the most competitive office markets in the U.S., 4.9 million square feet is empty. In northwest Atlanta, home to Cobb Galleria Centre, about 6.2 million square feet is empty.
The roots of the current glut stem from several sources, including the lax underwriting standards of the middle decade and the belief that commercial real estate prices would continue climbing.
http://atlanta.bizjournals.com/atlanta/stories/2010/04/19/story5.html?b=1271649600^3201151