Taking the lead in the speculative race is Boston-based Davis Marcus Partners which recently completed construction on 450,000 sf of spec office space in Waltham. The $83 million building is already 80% leased. The firm is also planning to break ground on an 180,000-sf speculative office building in January on another Waltham site.
"About one and a half years ago we looked at rising rents and double A space in the suburbs and we were projecting below 10% vacancy rates in the truly high class office market," Paul Marcus, a partner in the firm tells GlobeSt.com. "Given that we're 80% leased on our first speculative project, we've proving the concept."
Other developers are hoping to prove the same thing.
Real estate insiders tell Globe St.com that locally-based Boston Properties is preparing to unveil its own 200,000-sf speculative office project at 77 Fourth St. in Waltham and Bulfinch Companies of Needham is contemplating its own 65,000-sf spec building on Trapello Road in the same city.
Also planning to put spec office space on the market are Waltham-based Neelon Properties, which is reportedly considering putting up 65,000 sf of spec office space in its hometown, and Duffy Associates, which is currently building a 150,000-sf spec property on Waverly Oaks Road along the Waltham and Belmont line, real estate executives familiar with those plans say.
Interest in the speculative suburban market comes at a time when vacancy rates for class A space in Boston's Route 128 submarket have hit 9%.
Alexander Dauria, a suburban office market specialist for Jones Lang LaSalle in Boston tells GlobeSt.com that all this speculative building should have an impact on the market as landlords push the limit on rents for first class office space in the city's suburbs.
"It's a very visible and tangible indication of the bullishness on the part of developers to beta on the future viability of local commercial real estate markets and the rental rates that will support new construction," Dauria says.
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