Akamai Pre-Leases 468 KSF Boston Office Tower
- Nov 23, 2016
Boston—Akamai Technologies Inc. went looking for a new headquarters location in its hometown of Cambridge, Mass., and the company just found it. Akamai has pre-leased 145 Broadway, a 468,000-square-foot office project to be developed by Boston Properties in the city’s Kendall Square neighborhood. The project cost: approximately $517 million, as noted by Boston Properties CEO Owen Thomas during the REIT’s third quarter earnings call on Oct. 28.
It’s not that good space is hard to find in Cambridge; any space is hard to find in the coveted submarket. “The Cambridge office market is essentially full,” according to a third quarter report by commercial real estate services firm Colliers International. “Tenants continue to fight for space, as the few options that remain are flying off the market.”
Much of that limited stock that’s flying off the market is flying right into Akamai’s hands. Not only will Akamai occupy 145 Broadway under a 15-year agreement, the content delivery network services provider will grab even more square footage from Boston Properties’ offerings, having committed to leasing 150,000 square feet or more within the REIT’s Kendall Square portfolio.
Boston Properties expects to kick off development of the Pickard Chilton-designed 145 Broadway once the city and the Cambridge Redevelopment Authority give the green light. The real estate company plans to empty and then demolish the existing 80,000-square-foot, three-decade-old office structure on the site, also known as 11 Cambridge Center, during the second quarter of 2017. The new 19-story office tower will be a premier property, fit for the largest tech company based in the Kendall Square area. The state-of-the-art office space in the building will be complemented by approximately 9,500 square feet of ground-level retail space and, potentially, a café, roof deck, fitness facility and electric vehicle charging station.
Build out of the additional space Akamai will lease from Boston Properties will begin simultaneously with the commencement of 145 Broadway’s construction. Akamai will be free to relocate staff from its current Cambridge locations to its new digs at its leisure following the building’s completion in 2019. “We look forward to creating a campus environment for Akamai’s employees to further foster innovation and collaboration, and to build a headquarters that complements the thriving Kendall Square community,” Erica Chapman, vice president of Global Real Estate and Workplace Productivity at Akamai, said in a prepared statement.
Kendall Square is, indeed, thriving, and the state of the entire Cambridge office market tells the story. “Both office and lab landlords will remain in the driver’s seat as demand outpaces supply, and there is limited relief on the horizon, particularly in the core Kendall Square market,” per the Colliers report. Cambridge’s 4.2 percent office vacancy rate in the third quarter marked the lowest vacancy rate since the peak of the venture capital-backed tech boom in late 2000.