June 28, 2018
Peter Forman President & CEO South Shore Chamber of Commerce
George Toma Chairman South Shore Chamber of Commerce
Jim McDonough President & CEO Envision Bank
Elliot F. Eisenberg, Ph.D. President: GraphsandLaughs, LLC
: Blockchain/Bitcoin : Who is Satoshi Nakayama : The media loves it : I must get in on it! AND ** : Let me borrow to do it! **
: Leverage was limited : Leverage is impossible : Leverage was way too easy : No real economic harm : Hidden or Disclosed
Elliot F. Eisenberg, Ph.D. Cell: 202.306.2731 Elliot@graphsandlaughs.net www.econ70.com Do you want to get my daily 70 word economics email? Please give me your business card or text bowtie to 22828
Martie Dwyer Senior Vice President Commercial Banking Envision Bank
Rich Beal President: A.W. Perry, Inc.
Geography 128 Ring 495 Ring
General Stats = Glass
South Shore remains among the lowest vacancy submarkets Absorption dramatically impacted by Reebok s departure for Seaport, despite being a singular location Continued theme of limited large blocks of space consistent in 128 Ring, a surplus has not spurred recent demand along 495 128 Core (Waltham) suburban driver of construction Significant variation in pricing across suburban markets
In a word STABLE
Most suburban businesses are content & thriving Select 200k sf+ suburban occupants, logo at primary suburban location
Developers regionally responding to resounding desire for transit access 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 5 10 1991-2000 2001-2010 2011-2020 15 21 million sf office & lab delivered 30 million sf office & lab delivered 22 million sf office & lab delivered 20% 20 25 within a ten-minute walk of transit 36% within a ten-minute walk of transit 73% within a ten-minute walk of transit 30 35 40
Suburbs cognizant of challenges in making commuter rail relevant to workers When depending on walking distances, only a relatively small share of suburban population is within range of a commuter rail station 220,000 within a 10 minute walk
Suburbs cognizant of challenges in making commuter rail relevant to workers Last mile solutions dramatically extend the range of the car-free commuter throughout the region 3.1 million within a 10 minute drive
South Shore the most leased of suburban submarkets but not the most exciting
Mike Edward Executive Vice President: Perry Brokerage Associates.
Geography Streetcar Ring Cambridge Urban Boston
General Stats = Glass
Urban absorption remains strong, though numbers may trail the two million sf/year pace seen in the early 2010s Choices larger than 200k sf in very short supply, despite eight such commitments of that size last two quarters Construction pipeline dominated by built-to-suit activity Streetcar Ring increasingly serving as relief valve for squeezed out tenants Cambridge vacancy remains critically low, at 2.0 percent, just 1.0 percent in Kendall Cambridge office construction pipeline eclipses one million sf
In a word HISTORIC
An attraction on the part of the world s innovators 2018 Philips 600k sf 800k sf 1.0mm sf NBC Universal 2017 2016 PTC Facebook Alexion Pharma General Electric Reebok New/out-of-market occupants Infill occupants 2015 Bristol-Myers Squibb 2014 Baxalta 2013 Twitter Converse Amazon 2011 Pfizer Google 2009 Wyss Institute 2007 Microsoft 2005 Shire 2.1mm sf 2004 Schlumberger Broad Institute 2001 Novartis 2.8mm sf Currently anticipated eventual footprint of new Greater Boston or urban infill tenants since 2001
And it s not over World s 100 100 largest largest biopharmaceutical biopharmaceutical companies 2015 companies revenues 2015 revenues $10 billion $20 billion $30 billion $40 billion $50 billion Johnson & Johnson Cambridge AstraZeneca Waltham AbbieVie Cambridge Amgen Cambridge Abbott Laboratories Worcester Bristol-Myers Squibb Cambridge Takeda Pharmaceuticals Cambridge Merck KGaA Billerica, Rockland Biogen Cambridge Baxter Cambridge Fresenius Waltham Sanofi Cambridge Merck & Company Boston GlaxoSmithKline Waltham Novartis Cambridge Pfizer Cambridge, Andover Celgene Cambridge Shire Cambridge, Lexington Quintiles Cambridge Eisai Cambridge Sun Pharmaceuticals Billerica, Wilmington Sumitomo Dainippon Cambridge Alexion Pharmaceuticals Lexington Alere Waltham Flagship >100k sf Branch 10-100k sf Presence Beachhead <10k sf Boston Market Ipsen Cambridge Icon Cambridge, Marlborough
With significant demand coming from regional players Select occupants relocating from the suburbs to Urban Boston & Cambridge, last three years
With demand surging for all urban assets Urban Boston office investment price per sf by Class, since 2009 $900 $831 $800 $700 $600 213% Increase in Class B $ per sf Investment sales since 2009 $577 $721 $500 $400 $300 $299 $354 $393 $394 $275 $257 $315 $317 $322 $513 $426 $490 $524 $200 $167 $207 $100 $- A B 2009 2010 2011 2012 2013 2014 2015 2016 2017
Urban Overview Effects BOSTON LANDING ASSEMBLY ROW CAMBRIDGE CROSSING And persistent demand driving emergence of new urban-style commercial clusters INK BLOCK Suffolk Downs Site Boston/Revere Malden Center Redevelopment Malden Everett Avenue Chelsea Boynton Yards Somerville Widett Circle Boston Flower Exchange Site Boston Future Harvard campus Allston Tremont Crossing Roxbury Morrissey Blvd Redevelopments Dorchester
TO: 228-28 SUBJECT: pbaresearch @BOSqFt
Charlene Flynn President: The TLC Companies
Increased demand for transit-oriented locations Mixed use, convenience-focused environments Some markets to watch: Quincy Center up 12.8% Wollaston up 8.3% Davis Square up 100% Days on market decreasing as prices going up
Mixed-use, single level such as BRIO Golf and community-oriented such as Pinehills Large, master planned such as Union Point Town center vibe such as Mill Wharf and Lincoln Building
Peter Forman President & CEO South Shore Chamber of Commerce