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2020 Q3 Market Viewpoint Report Boston Colliers

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Conditions continue to soften in the Boston market. After a record-setting decline in Q2, absorption struggled again in Q3, when overall negative net absorption of 1.3 million SF sent the vacancy rate up to 12.6%, its highest rate since Q1 2013. Sublease space has flooded the market, adding a net 630,000 SF in the quarter. This marks the most sublease space ever added to the market in a two-quarter period of time, topping the figure in the early 2000s recession. Meanwhile, rents have begun to weaken, though only slightly, with Class B declining less than 1% in Q3.

Vacancies barely budged in the third quarter, up to 4.5%, and rents softened slightly. However, given the low vacancy rates, any change in direct vacancy can have an outsized impact on rent levels. As Boston and the suburbs held flat, that is the likely outcome in Cambridge as well. New development, which is highly preleased, has yet to come on the market, and new projects have recently been announced. Tenants continue to look to Cambridge for expansion, as seen by Bristol-Myers Squibb’s recent deal at Cambridge Crossing.

Suburban absorption took a sharp turn down in the third quarter, by negative 1.5 million SF, the first quarter with such losses since the first quarter of 2009. These losses were widespread in markets, except 128 South, supported by the completion of two build-to-suit projects for Meketa and Citizens Bank, and Tufts’ purchase of the former Reebok campus, dubbed The Block. Both direct and sublease space increased, after holding steady at midyear. Vacancies are back to 17.2%, reminiscent of early 2018 levels.

 

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2020 Q3 Market Viewpoint Report Boston Colliers

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Aaron Jodka

National Director of Capital Markets Research

Boston

As Research Director | U.S. Capital Markets, Aaron is responsible for all aspects of research within the Capital Markets platform. He synthesizes and interprets a variety of data and information to stay ahead of trends that put our clients in an optimal position to make informed decisions. Additionally, he ensures that Colliers professionals are providing superior service and deliverables to existing and potential clients. At the same time, he promotes the Colliers brand via best-in-class research reports, weekly insight posts, thought leadership, and contributions to numerous panels, media outlets, and industry events.

Aaron collaborates with every team at the firm and wears many hats: in-house economist, advisor, consultant, thought leader, strategic business analyst, presenter, and, of course, researcher. He connects with various industry experts within the Colliers organization to provide a customized solution for each client.

With a deep understanding of markets throughout the country, he provides a unique perspective on market dynamics across asset types and investment strategies, providing clients with tailored data and analytics to ultimately guide decision-making solutions.

As the Managing Director, Research & Client Services, Aaron oversees all aspects of Client Service offerings in Boston, including Research, Marketing, Graphics, Financial Analysis, Lease Administration, and Client Service Coordination. He ensures that our brokers are providing superior service and deliverables to existing and potential clients. At the same time, he assists brokers with pitch preparation and delivery, while continuing to push the Colliers brand via best-in-class research reports, thought leadership, and offers market insight as a monthly guest on Bloomberg Radio’s Baystate Business, and is a frequent resource for Bisnow, Banker & Tradesman, The Boston Globe, Boston Business Journal, The Real Reporter, and other publications.

Aaron's team manages the information and intelligence in our proprietary database, which, dating from the late 1980s, includes detailed property statistics on nearly 220 million SF of office space as well as on lab properties in the Greater Boston area. We also track more than 150 million SF of industrial properties in our market.

Before joining Colliers, he spent 11 years with Property & Portfolio Research (PPR), now CoStar Portfolio Strategy. There, he advised institutional clients on their commercial real estate investment strategies across property sectors and also spoke at industry events, quarterly CoStar webinars, and in front of client audiences. Aaron also led and directed a team of economists who monitored property markets across the United States. Near the end of his tenure, he helped establish a new business unit at CoStar, leading in the hiring, training, and coaching of a team of 50 market analysts. 

Outside of the office, Aaron can be found cheering on his children at their extracurricular activities. He also enjoys hiking, travel, relaxing at home or at the lake, or plugging away at one home project or another. Last but not least, he's an avid fan of Boston sports teams.

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Dion Sorrentino

Research Analyst

Boston

Dion Sorrentino joined Colliers International Boston as a Research Analyst in 2019. In this capacity, he contributes to the production of the firm’s quarterly Market Viewpoints, as well as managing the distribution of its weekly newsletter, Week in Review. In addition, he collaborates with brokerage and advisory teams on their client work and presentations.

Dion assists in managing the Colliers International Boston proprietary research database, which contains data on over 360 million square feet of commercial space in approximately 4,000 buildings in the Greater Boston area, encompassing Boston, Cambridge, and Suburban Boston and the insights it delivers. Dion also works with the rest of the research team to provide timely and reliable data that is critical to making effective and well-informed business decisions, including available space surveys and market trend analyses.

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Nick Dessalines

Research Analyst

Boston

Mr. Dessalines joined Colliers International in 2020 where he is currently a Research Analyst. Mr. Dessalines’ responsibilities include analyzing and identifying market trends, working with brokerage teams on multiple client-related projects and initiatives, preparing quarterly market reports, and supporting the leasing and Capital Markets teams with various property and market level research.

Mr. Dessalines has worked in the real estate industry since his undergraduate days at Stonehill College. Prior to joining Colliers, Mr. Dessalines was a Brokerage Intern at CBRE in 2017 and then, upon graduation the following year, Mr. Dessalines joined JLL as a Data Analyst where he focused on tracking the Boston, Massachusetts and Hartford, Connecticut real estate markets.

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