Spec development at 4 Burlington Woods

4BurlingtonWoodsPrimaryRendering 1085CUB Burlington Woods, View02 Sept910PM,2014The Gutierrez Company has begun construction on 4 Burlington Woods, a new 100,000-square-foot LEED Certified first class office building designed for end user flexibility in Burlington. As leasing agents, JLL teamed with Gutierrez to launch the project with an event at Keurig’s innovative new world headquarters overlooking 4 Burlington Woods’ five-acre site.

As reported in the BBJ, 4 Burlington Woods features efficient and open floor plates maintaining connectivity, a two-story lobby, five acres of landscaped grounds, and direct highway access. The new four-story building off Route 128 will also include interconnecting stairways, floor-to-ceiling windows along the main façade and 6’6” throughout the rest of the space, high ceilings, and energy efficient systems. The site has parking for up to 350 cars. Development is scheduled for completion in Q1 2015.

“The delivery of 4 Burlington Woods will be great for the Route 128 market,” said JLL’s Chris Decembrele. “Given the flexibility and uniqueness of the project, we are seeing users of all types and sizes show interest in becoming the first tenant. In the Burlington market, where large blocks of vacant space are getting scarce, this will be a great option for growing tech companies.”

According to Gutierrez VP of Operations Doug Fainelli, who spoke at the breakfast event: “We’re confident that top quality new construction in amenity rich areas that allow employers to retain and attract talent will prosper. 4 Burlington Woods will be just that type of development.”

Joining Chris on the leasing and marketing team for JLL is Managing Director Matt Daniels, Senior Vice President Andrew Whipple, and Senior Vice President Stephen Steinberg. The architect is CUBE 3.

Tug o’ war between Boston and the ‘burbs

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From Nate Ardente
Research Analyst 

Decisions, decisions. It is what many tenants and landlords are facing now in the Greater Boston commercial office real estate market. Where should they locate their office or lab facility? Where should they invest? Is it better to be located in the city or the suburbs? The debate between office versus suburban locations is alive and well. Which side is winning in this tug of war?

In yesterday’s NAIOP of Massachusetts event, a panel of some of Boston’s most respected local commercial real estate professionals discussed the various factors that come into play. The consensus after deliberating for an hour at the Westin Waterfront in the Seaport District was: both.

The event was moderated by JLL’s Frank Petz, Managing Director of Capital Markets, and included Tom Alperin of National Development, Bryan Koop of Boston Properties, Andrew Majewski of CBRE, and David Martel of Cushman & Wakefield.

The event was moderated by JLL’s Frank Petz, Managing Director of Capital Markets, and included Tom Alperin of National Development, Bryan Koop of Boston Properties, Andrew Majewski of CBRE, and David Martel of Cushman & Wakefield.

 

That being said, one topic that garnered a lot of attention was the strength of what we refer to as the “Fortress Market” – defined by cities along the I-95/Route 128 corridor and the Waltham/Burlington corridor. This area has and continues to increase its prominence as a premier place for many firms to locate. In fact, as of second quarter, the Fortress Market displayed a lower vacancy than downtown Boston for the first time since 2001.

Historical vacancies

Tenants base their location decisions upon many factors such as talent, amenities, cost and access. The balance between these factors is what separates each market, and depending on how tenants weigh each factor results on where they will end up. In the end, Greater Boston offers a variety of settings in which a firm can meet its growth objectives, and the suburbs continue to hold their own in this tug of war.

JLL High-tech Outlook ranks Boston second in sector employment

Greater Boston ranks second in total high-tech employment, and fourth in high-tech venture capital funding among major U.S. markets. This is according to our 2014 U.S. High-tech Office Outlook, a national ranking of top cities for high-tech companies. The ranking, just released and reported in the Boston Business Journal, shows the impact of the sector on neighborhoods, employment, housing prices and amenities.

“Tech companies are looking for new locations for many reasons, not just for intellectual capital, or venture capital funding but other factors such as standard of living,” said Julia Georgules, co-lead of JLL’s Technology Research group. “In our research, we call this ‘market dynamism.’ We have looked at different lifestyle factors for each of the 34 tech hubs including proximity to transport and walkable amenities.”

While the high-tech industry’s growth is driving employers to find new locations for both talent and real estate, traditional high-tech cities are not exactly struggling. Long-standing hubs continue to function as the industry’s economic engines. In fact, seven traditionally high-tech-centric markets represent more than a fifth (21.7 percent) of the 65.4 million square feet of office space under construction across the country. Together, 14.2 million square feet of office space is under construction in Boston, the Bay Area, New York’s Midtown South, Seattle, Portland and Austin.

“High-tech employment continues to be a driving force for the Boston economy and real estate market,” said JLL New England Senior Research Analyst Jordan Yarboro. “Boston ranks second trailing only Silicon Valley in total high-tech employment. In fact, Greater Boston experienced a 4.3 percent growth in high-tech jobs over the year.”

As rents escalate and space becomes scarce in mainstay markets like San Francisco, Silicon Valley and Manhattan, the lure of more affordable prices have high-tech companies seeking talent and real estate elsewhere. The savings potential is huge. Downtown Palo Alto, considered the heart of Silicon Valley, has seen such high demand that the office market is just 3.6 percent vacant with average asking rents at $86 per square foot compared to the national average of $30.

This even tops New York City’s Plaza District at $85 per square foot. And rents in smaller markets can be less than half that figure. “High-tech’s growth is not exclusive to traditional high-tech markets anymore,” said Cara Trani, co-lead of JLL’s Technology brokerage group.

“Here in Greater Boston, we see growing high-tech clusters in the suburbs, Cambridge and CBD. Companies both large and small are competing for top talent, and office space is one of the ways they can use to recruit and retain,” concluded Jordan.

Our 2014 report features the top 34 high-tech markets across the country. It digs deep into what makes a market “cool” or “livable” with a new Market Dynamism index.

To get a copy of this report contact us here.

 

Office trends: 5 questions with JLL’s project management team

O'Connor_Tom_Color_Casual_smallWe sat down with Tom O’Connor, Senior Vice President of JLL’s Project and Development Services (PDS) group to understand some of the trends affecting office space usage in the Greater Boston market. The 35-person PDS team serves as project managers and advisers for many of our clients as they design fit-out and move into their new office space.

Q: What stands out to you as different in this cycle compared to the last tech cycle (the dotcom era)?  The hunt for talent!  The difference today is that Boston has become home to companies like Amazon, Ebay, Twitter and Google.  These high-tech giants were not in Boston in the year 2000. Having them here has stepped up the hunt for talent and has elevated the playing field.

Q: How has having these tech giants active in our market affected real estate decisions? Small to midsize firms are competing with large tech firms for talent. These large firms offer benefits such as free breakfast/lunch/snacks and offer great work environments.  Small to mid-size firms are taking more interest in choosing office space that reflects their culture and their brand. They want to create a destination and a work environment that is appealing to their employees and gives the employees a sense of pride and loyalty in the firm and space in which they work.

Q: Everyone has been talking about how firms are increasing their space utilization and putting more people in less space. What are your clients doing today?  Yes. It’s true. We did for some time really see a trend towards increasing space efficiency.  And high- tech firms were at the cutting edge of the trend, bringing in benching and shrinking personal space. Today, the trend towards efficiency is less a focus. The trend is more about reallocating the use of the space.  Firms are still shrinking personal space but providing more collaborative space in exchange.  Employers are asking to build various types of space that allow for different type of work. So lounge space, heads down space, collaborative space, and social room/game room space are a few examples of what we are building out. In all, the total square footage may remain the same, but how employees use the space continues to evolve.

The continued evolution of office space use reflects the generational changes and push for efficiencies that are affecting the workforce.

The continued evolution of office space use reflects the generational changes and push for efficiencies that are affecting the workforce.

Q: Is benching still “in”? Benching continues to be a good alternative for technology firms. Having walls that separate personal space gives a false sense of acoustic privacy. And today’s younger workers are used to getting stimuli from a lot of places while they work. They also like to see what’s going on around them and feeling that they are a part of something. We are seeing this trend continue to be sticky with our clients at the moment.

Q: Speaking of the younger workforce, while the millennial generation is expected to make up 50% of the workforce by 2020, there is still another 50% of the workforce with differing expectations with whom organizations need to be in tune. How are firms accommodating the differing needs of multiple generations?  Firms need to remember not to focus on just one segment of the workforce, especially if they want to be in the space long term and they want to be holistic in their approach to employee retention. Many firms need to take a hard look at their employee profile. Do they want to groom young workers and hope they stay for years? Do they expect to see high turnover and always draw from a young workforce/recent graduate pool?  Do they expect to grow over the next few years? Are they already inter-generational? Answers to these questions will guide firms in making space design issues that reflect their generational profile and workforce goals. We worked with one firm that conducted an internal survey to answer these questions. LevelUp asked its employees questions about the type of space they would like to be in. But the employees were only allowed to answer the questions with pictures. We were able to identify what the employees find relaxing, inspiring, motivating and what type of space they feel would help them best do their jobs.  The findings will be used as they build out their new space.

 

 

JLL Research releases Q2 North America Industrial Outlook

JLL National Research just released its Q2 North America Industrial Outlook. It is reporting that industrial vacancy is now below a prior cyclical low, and will trend toward 7.0 percent by year-end. Rents are increasing as new development continues to play catch-up after 2010-13 marked a 50-year delivery low.

Rent growth is pronounced in those regions with vacancy rates well below the national average. Southern California, the Northwest and Southwest lead in year-over-year asking warehouse rent increases. Gains are expected as market fundamentals tighten in the Midwest, Northeast, Mid-Atlantic and Southeast.

But how is Boston doing?

  • The Greater Boston industrial market experienced its strongest leasing quarter of the year, posting 235,061 square feet of positive net absorption
  • Sales activity continues to expand in the sector
  • Q2 saw 24 industrial sales transactions from properties over 30,000 square feet
  • The development of build-to-suit projects in Greater Boston is becoming more prevalent
  • The 495/Mass Pike submarket continued to be one of the best preforming industrial markets in the region

Q2IndustrialDrivers

The outlook is good for the Greater Boston market. Build-to-suit projects are beginning to materialize as predicted in the previous quarter, due to the great market conditions and the region’s antiquated supply. We are experiencing the start of a new industrial development cycle with market conditions not seen since the early 2000’s! We expect to see investor activity and more build-to-suit deals in the near future.

View our Boston Industrial Highlights – Q2 2014 research report for more details on Greater Boston’s Q2 performance.

Sailing in Newport

Our Mass Pike/Route 128 and South Brokerage teams, and clients took to the high seas for a thrilling day of sailing out of Sayer’s Wharf in Newport, RI.

We chartered two classic 12 Meter-class yachts, the Columbia and Heritage, both of which competed in past America’s Cup challenges. After racing practice with captains and crews, a spirited one hour race ensued.

Following the competition guests enjoyed a post-race cruise around beautiful Narragansett Bay, cocktails, and a walking tour of Newport. Above are some photos from an invigorating day.

4th Annual Rockin’ Real Estate Harbor Cruise

Over 200 CRE professionals mixed business with pleasure on the decks of the 4th Annual NAIOP Harbor Cruise last night, featuring networking, cocktails, a freshly shucked oyster bar and live music by B11. Friends and colleagues connected while enjoying a 360 degree view of Boston’s ever-changing waterfront.

Upon arrival attendees were encouraged to bring school supplies benefiting Building Impact’s efforts to equip children with pens, pencils, notebooks and book bags.

It was an evening enjoyed by all, eventually wrapping up at Bostonia Public House for additional appetizers and signature cocktails hosted by Synergy Investments.

 

Project and Development Services continues growth with four new hires

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Ted Finnerty

Ted Finnerty joins the Boston team from JLL’s New York office, where he was a Vice President and Associate Director. Prior to coming to Boston, Finnerty led the 12-person capital improvement team for the Empire State Building. The team implemented owner work, over $80 million of construction annually, and oversaw another $60 million annually of tenant installations. His experience also includes a number of tenant fit out projects of varying sizes for a variety of clients. Finnerty has a Bachelor of Arts degree in History from Dartmouth College and a Master of Science degree in Construction Administration from Columbia University. He is a LEED Accredited Professional and was named to Real Estate New York’s “Top 30 Under 30” list in 2007.

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David Gifford

David Gifford has broad experience in all aspects of project management, with a focus on hospitality, multi-unit housing, and commercial interiors. Recently he has managed several projects for Fidelity Investments, including the renovation of 120,000 square feet of office space for 12 unique business units, consolidating them from three separate buildings into one. Prior to joining JLL, Gifford managed and led the design of the 455,000 square foot W Boston Hotel & Residences and the interior design and fit out of Tremont Tower in Boston, a 116,000 square foot high-rise luxury condominium complex. He has a Bachelor of Architecture degree from the Boston Architectural College and an Associate of Applied Science degree in Architectural Engineering from Alfred State University.

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Frank Plati

Frank Plati comes to JLL from Consigli Construction, where he was involved in project management and site supervision for assignments including renovations at Landmark Center, MIT, Emerson College, Harvard and Equity Office. Prior to Consigli, Plati was with Shawmut Design and Construction, where he focused on retail projects. He has a Bachelor of Science in Architectural Engineering Technology from Wentworth Institute of Technology.

Dee Brooks is an experienced project manager who has successfully managed projects in the commercial, retail, restaurant, insurance and medical fields. She was recently responsible for interior renovations of 40+ T-Mobile retail stores in the Northeast region, as well as the move management of 2,200 employees to a new location for the UnitedHealth Group. Other representative clients include Aetna and The Hartford. Brooks is a Green Globes Professional and attended Middlesex College in Middletown, Connecticut.

With the addition of Finnerty, Gifford, Plati and Brooks, the PDS group has grown by six in 2014. The Boston team is now comprised of 35 project and development management professionals.

Quiet! Please!

From Bob Best, Executive Vice President

From Bob Best
Executive Vice President

Why aren’t open offices as productive as they could be? The main culprit is noise.

In a recent New Yorker article Maria Konnikova writes: “In laboratory settings, noise has been  repeatedly tied to reduced cognitive performance. The psychologist Nick Perham, who studies the effect of sound on how we think, has found that office commotion impairs  workers’ ability to recall information, and even to do basic arithmetic.”

Blocking out the noise with earphones and music is not the answer.  That, too, interferes with mental acuity.

As many of us working virtually in coffee shops and public places, the same problem applies. Between public announcements, piped-in music and bad acoustics, we are fighting a losing battle.

I thought noise-cancelling earphones were the answer. Apparently not.

The answer is for office planners and the people who want us to visit their places and buy their stuff (e.g. coffee), to make these environments worker-friendly. That means making them quieter.  Please!

JLL Boston Research team gains momentum

As the market in Greater Boston rises, so do the forces of our JLL New England research team. Headed up by Director Lori Mabardi for the past 4 years, the team is now up to six full-time members to help our Market further deliver the best-in-class research we are known for. Thearin Than and Jordan Yarboro, Senior Research Analysts, will continue to serve their important roles of delivering market insight internally and externally while focusing on the incorporation of technology and innovation.

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Lisa Strope (top) & Nate Ardente (bottom)

A big welcome to Lisa Strope, who joins us as Research Manager coming from Harvard Business School where Lisa helped co-author the HBS Case Studies for their Real Estate program. Prior to her work at HBS, Lisa was a Development Director for Keystone Development Group in Berkeley, CA.

An additional welcome to Nate Ardente, who initially joined JLL as an intern in June and turned full-time this month. His focus will be on the Rt.128, Rt. 495 and South markets, as well as Industrial and Hartford.  He joins us after graduating from Tulane University with a Master’s Degree in Sustainable Real Estate Development with a concentration in Finance.

Alec MacKinnon, the third new member of our team, is a student at Northeastern studying economics and joins us from the Coop program for the fall semester. Alec interned with Avalon Bay last summer and will be assisting our team with special projects until December.

These additions and enhancements deepen the bench, capabilities and expertise of the JLL Research Team to expand the knowledge we continue to bring to the table for our clients and colleagues.