The MBTA Red Line was unquestionably the Pain Train of the first post-Labor Day workweek, with mechanical snafus making for a series of nightmare commutes. But its status as the Brain Train connecting to some of the region’s priciest commercial real estate remains on track.
In Cambridge’s Kendall Square at the doorstep of MIT, asking office rents now top $85 per square foot, the highest of any submarket near a subway stop in Boston and Cambridge.
In an analysis of commercial rents within walking distance of T stops in Boston and Cambridge, Colliers International found few bargains left in the urban core following a 30 percent rise in class A rents and 60 percent increase at class B properties since the last market downturn. Workspaces in revitalized neighborhoods such as Downtown Crossing and Government Center are catching up to office space in Financial District towers.
A few pockets of affordability remain in areas such as North Station, where asking rents remain just below $45 per square foot. That’s unlikely to continue much longer, with the first phase of the 1.5-million-square-foot Hub on Causeway development going vertical at the TD Garden and Bulfinch Crossing reshaping the Government Center garage complex.
“Those two developments stand to physically bookend the market and change the perceptions of office space and product,” said Colliers Director of Research Aaron Jodka, noting that co-working space provider WeWork recently announced it will open its fourth Boston location at 200 Portland St. in the Bulfinch Triangle.
And despite the departure of several large office tenants for the Financial District and Seaport, Back Bay still has Boston’s highest-priced office space. Buildings within a 5-minute walk of Hynes Convention Center station on the Green Line average $66.69 per square foot, partly reflecting the completion of Boston Properties’ 888 Boylston tower anchored by Natixis Global Asset Management.
“It still remains the premier submarket in a lot of tenants’ eyes, and landlords are holding the lines on rents despite the higher vacancy rates in that submarket,” Jodka said.