June 28, 2018 Peter Forman President & CEO South Shore Chamber - - PowerPoint PPT Presentation

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

5 10 15 20 25 30 35 40

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

1991 - 2000

21 million sf office & lab delivered

20%

within a ten-minute walk of transit

2001 - 2010

30 million sf office & lab delivered

36%

within a ten-minute walk of transit

2011 - 2020

22 million sf office & lab delivered

73%

within a ten-minute walk of transit

Suburbs cognizant of challenges in making commuter rail relevant to workers When depending

• n 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

• f 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

Urban Boston Cambridge Streetcar Ring

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 Cambridge

• ffice

construction pipeline eclipses one million sf Cambridge vacancy remains critically low, at 2.0 percent, just 1.0 percent in Kendall Streetcar Ring increasingly serving as relief valve for squeezed

• ut tenants

In a word

HISTORIC

An attraction on the part of the world’s innovators

Currently anticipated eventual footprint of new Greater Boston or urban infill tenants since 2001

2001 2004 2005 2007 2009 2011 2013 2014 2015 2016 2017 2018

Novartis Broad Institute Schlumberger Shire Microsoft Wyss Institute Google Pfizer Amazon Converse Twitter Baxalta Bristol-Myers Squibb Reebok General Electric Alexion Pharma Facebook PTC NBC Universal Philips

1.0mm sf 800k sf 600k sf 2.1mm sf 2.8mm sf

New/out-of-market occupants Infill occupants

And it’s not over

World’s 100 largest biopharmaceutical companies 2015 revenues

$10 billion

World’s 100 largest biopharmaceutical companies 2015 revenues

$20 billion $30 billion $40 billion $50 billion Johnson & Johnson

Cambridge

Novartis

Cambridge

Pfizer

Cambridge, Andover

Sanofi

Cambridge

Merck & Company

Boston

GlaxoSmithKline Waltham AstraZeneca

Waltham

Amgen Cambridge Abbott Laboratories Worcester Bristol-Myers Squibb Cambridge Takeda Pharmaceuticals Cambridge Merck KGaA Billerica, Rockland Biogen Cambridge Baxter Cambridge Celgene Cambridge Shire Cambridge, Lexington Quintiles Cambridge Eisai Cambridge Sumitomo Dainippon Cambridge Alexion Pharmaceuticals Lexington Alere Waltham Ipsen Cambridge Icon Cambridge, Marlborough Fresenius

Waltham

AbbieVie Cambridge Sun Pharmaceuticals

Billerica, Wilmington Flagship

>100k sf

Branch

10-100k sf

Boston Market Presence

Beachhead

<10k sf

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

$299 $354 $393 $394 $315 $577 $513 $831 $721 $167 $207 $275 $257 $317 $322 $426 $490 $524 $- $100 $200 $300 $400 $500 $600 $700 $800 $900

2009 2010 2011 2012 2013 2014 2015 2016 2017

Urban Boston office investment price per sf by Class, since 2009

213%

Increase in Class B $ per sf Investment sales since 2009

A B

Urban Overview | Effects

And persistent demand driving emergence of new urban-style commercial clusters

BOSTON LANDING ASSEMBLY ROW CAMBRIDGE CROSSING INK BLOCK

Future Harvard campus Allston Boynton Yards Somerville Suffolk Dow ns Site Boston/Revere Morrissey Blvd Redevelopments Dorchester Flow er Exchange Site Boston Widett Circle Boston Malden Center Redevelopment Malden Tremont Crossing Roxbury Everett Avenue Chelsea

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