Boston’s Office Market Is Worsening As More Developers Pivot To Labs
According to recent reports by CBRE, Avison Young, Colliers, and Hunneman, there was a sharp bifurcation between the performance of lab science market and the rest of the office market in Boston, during 2020. According to Colliers, over the past year, during Covid-19, the lab market in Boston had experienced major deals and record low vacancies. At the same time, metro office market reported a negative absorption of 4.2 million square feet, which is a record low. For example, the according to CBRE, daily occupancy of downtown office buildings after Labor Day sat between 8% and 12% before dropping to 5% and under in mid-December. Furthermore, Aaron Jodka, the managing director for research in Boston for Colliers, explained that Coworking, a significant occupant of office space, also saw a retrenchment. He explained that,” It is showing the challenges of that industry, or segment right now. WeWork is the second-largest tenant in Boston.” At the same time, he has expressed confidence in its long-term survivability for flexible office space. He explained that, “It allows for flexibility that a standard lease does not provide for. It allows flexible growth, access to spaces across multiple markets at once, with those memberships, and we see that industry continuing to grow long-term.”
Rent-stabilized tenants owe landlords more than $1B
According to a recent survey by the Community Housing Improvement Program, tenants in New York City’s rent stabilized apartments are more than $1 billion behind on their rent payments as Covid-19 continues to pressure renters. The survey only focuses on rent stabilized units in New York City, which covers about half of the total number of rental units in the city or about 185,000 households. Jay Martin, who is an executive director at CHIP, explained that, “It’s not an insurmountable amount,” Martin told the Journal. “The numbers tell us that, probably, if we could get an additional $1 billion or $2 billion in the city, we could probably pay off every single renter’s arrears in the entire city of New York over the last year of the crisis.” Currently, landlords are prohibited from evicting tenants until May of this year; and in addition to a 1.3 billion rental assistance for New York state, many expect the incoming president Biden to pursue additional stimulus measures.