"The 495 North market is in some ways experiencing the most dramatic recovery in all of Boston," says Brendan Carroll, a researcher with the firm. "Over the last six quarters, the submarket's 8% occupancy growth rate outperforms all submarkets for all property types."
Although the vacancy rate in the submarket remains the highest in all of Greater Boston at 28.7%, the Route 495 class A office submarket has experienced 701,000 sf of positive absorption during the past five quarters, Carroll says. That has driven vacancy rates for class A office properties down from 39.3% just five quarters ago and caused rents to shoot up by 8% in the fourth quarter, he notes. Overall vacancy rates for class A office space in Greater Boston currently stands at 16.1%.
Driving absorption in the suburbs north of Boston has been a flight to quality by companies, many of which are looking for large blocks of contiguous class A space, Jamey Lipscomb, with Richards Barry Joyce & Partners tells GlobeSt.com.
"There's certainly been a flight to quality," says Lipscomb, "but the rates have traditionally been lower [in that submarket] and you have larger blocks of space which has attracted a lot of the larger corporations to that area."
One of the big benefactors of that race for quality and size has been Cross Point, a three-building, 1.2-million-sf office park in Lowell that has done 540,000 sf of new lease deals and renewals in the past year. The park, which has attracted such big names as communications giant Motorola, occupies a strategic location at the junction of Routes 495 and 3, allowing it to draw from both the Boston and New Hampshire markets, Lipscomb says.
The submarket has also become less dependent on the high-tech companies that populated the area during the boom days of the 1990s. Now medical device and defense contractors, all looking for large spaces and cheaper rents, have become a fixture in the area, he notes.
Even Westford, which had been a hotbed for technology, is seeing a resurgence that is driving vacancy rates down into the single digits.
Although, Lipscomb says the submarket "still has a long way to go" before it is fully recovered, there are some signs that it may be heading in the right direction. While there are no spec buildings going up in the market, Lipscomb says some tenants are already talking about building rather than rehabbing older facilities.
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