Startups Boost Rent in Class-B Office Space
Turns out Boston startups prefer the exposed brick and beams of Class-B buildings over the modern amenities in Class-A buildings. Due to all this demand, Class-B low-rises are commanding rents equal to the lower floors of Class-A high-rises, quite possibly for the first time ever. In a unique trend, Class-B buildings oozing with character consistently have fewer vacancies than modern Class-A towers, the Boston Globe reports. As a result, Class-B rents have leapt 32% over the past three years, while Class-A rents have only risen 18%. Investors are pouncing on the opportunity. Synergy Investments president David Greaney saw it coming a mile away and started buying and renovating older office properties near transit in the early 2000s. In 2008, the company paid $33.8M ($280/SF) for 100 Franklin St (pictured), a then 100-year-old building. After an extensive renovation, it sold the building to Clarion Partners for $48.7M ($400/SF). Today Synergy owns 30 Class-B properties in Boston and Quincy. [Globe]
