New Leases Drive Down Vacancy In Natick, Framingham
The office vacancy rate in Natick and Framingham dipped below 10 percent in the first quarter of 2013, according Boston-based Richards Barry Joyce & Partners, a favorable development for landlords in the two MetroWest towns.
The Greater Boston submarket of Natick and Framingham saw its vacancy rate decrease from 11.8 percent to 9.9 percent over the last three quarters, RBJ&P said in its quarterly report this week.
Lease deals for key Class A properties cut vacancy by 83,000 square feet, the report said, thought the firm did not identify the properties or new tenants.
A Landlord's Market
When a submarket's vacancy rate falls below 10 percent, it's a strong indication that office building owners have more power when it comes to setting pricing, as potential tenants have fewer options, said Brendan Carroll, senior vice president at RBJ&P.
Carroll said the 1.9-point drop in vacancy is a "pretty meaningful reduction."
"The tenants don't have the ability to play off each other and to leverage in order to get the price they really want," Carroll said.
Office vacancy in the two MetroWest towns is the lowest it's been since the fourth quarter of 2011, and Carroll said he expects the downward trend to continue. Carroll noted there is no new commercial construction on the horizon and said tenants continue to be lured to the area for its proximity to Boston, educated labor pool and retail amenities.
The Price Is Right
Relatively low office vacancy is not out of character for Natick and Framingham. Carroll said the rate has sometimes fallen below 10 percent in recent years. In general, the towns tend to do better than the Greater Boston market as a whole, which had a vacancy rate of 14.5 percent in the first quarter of 2013, with a 15-year average of 14.1 percent.
In addition to its proximity to amenities, the city, and the right workforce, Carroll said tenants are also attracted to the prices in Natick and Framingham.
The towns are third in line when it comes to prestigious office space locals in Greater Boston, behind Boston and Waltham. Although Natick and Framingham are virtually identical to Waltham in attributes, Carroll said Waltham "commands significant premiums in comparison."
"That discount has really attracted users," Carroll said.
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