DTZ_Akamai_RFI Response Flipbook
FEATURES & BENEFITS
KEY PERFORMANCE INDICATORS
Following is a sample comparison of the features and benefits of the two cities. CITY A CITY B Access to talent 4 4 Opportunities for growth / consolidation 1 5 Amenities 5 3 Transportation 4 4 Access to live / work / play 5 5 Tax incentives 1 3 Total occupancy cost 1 3 Total 21 27 SAMPLE COMPARISON This section illustrates the research done to show that: • City B provides a much greater opportunity for growth and consolidation for Akamai, thus diminishing the risk of impeding the business goals because of space constraints. • City B provides the same level of access to talent that City A does. Recruiting and retaining talent is one of the primary goals of the company. • The total occupancy cost in City B is significantly below that of City A. This feature will align with Akamai’s strategy of operational excellence and fiscal responsibility. Additional back-up documentation would be included in a final package detailing this approach. Scale of 1-5, with 5 being the best
Some examples include: • Alignment with long term strategy and corporate goals. • Achieve outcome that positions Akamai as a leader in its field and a place where people are excited to go to work. • Deliver an innovative solution to the current challenge of location / space needs.
Economic Overview
GreaterBostonOfficeMarketSnapshot
EconomicOverview Last year, the June jobs report heralded “early fireworks” as the number of new non-farm jobs topped 200,000 for the fifth consecutive month. Lastweek, headlines announced that June 2015was the 57th sequentialmonth ofpositive job creation.And at 5.3%, national unemployment is at its lowest level sinceApril 2008. Yet nearly all articles expressed universal disappointment – not only that the223,000 jobs createdwere significantly lower than predicted, but that, at2% year-over-year,wage growth is essentially stagnant. We can certainly speculate about what thesenumbersmean for commercial real estate (andBoston in particular)but the truth is that employment statistics havehad little to dowith greaterBoston occupancy trends in recent years. We know that thehealthcare, education and innovation sectors have protected us fromwild swings, but trends inworkplacedesign and remotework policies havehadmore of an impact on vacancy rates than employment trends. Sowe’re focusing on entrepreneurs opting for shared space,millennials heading for the coffee shop and established firmsdrivingdown square footage per employee.At least for now, in our region, these are the more significantdrivers of growth and contraction. UPDATEDW Q42014 OFFICESTATS
MarketSummary At 1.7million square feet (MSF), mid-year absorption is the strongest ithasbeen sincemid-year2005. Metrowide, leasing activity is solid – and themajority of activity canbe attributed to ahandful of deals over 100,000SF (HoughtonMifflin,Bristol- MyersSquibb,GeneralDynamics in Westwood andDedham – toname a few this quarter). InBoston, investment sales activity pairedwith tightening vacancy means that classB rents are climbing – in some cases over 30% in the past6months. InCambridge, office availability has dropped 5.0 percentagepoints (to 8.1%) since the beginning of the year.And in an interesting suburban twist,markets in the southwere the liveliest for the first half of the year. With solidmarket conditons, a significantnumber of tenants in the market for over50,000 square feet and largeblocks of centrally located space rapidlybecoming extinct,we arewatching for the reemergence of speculative construction. Outlook
Q22014 Q22015
OverallAvailabilityRate 19.1% 17.5%
AverageAskingRent
$30.88PSF $32.11PSF
NetAbsorption YTD 530,768 SF 675,207 SF
OverallO ceMarketStatistics Q22015Summary
OverallOfficeStatisticsSummary
Current Asking
YearOver Year
QuarterOver QuarterChange
Location
Boston
$46.48PSF
Cambridge
$55.55
Suburbs
$22.62
Current Availability
YearOver Year
QuarterOver QuarterChange
Location
Boston
14.7%
Cambridge
8.1%
Suburbs
21.9%
Market Watch Boston | Second Quarter 2015
Current NetAbsorption
YearOver Year
Location
144,731SF
Boston
510,717SF
Cambridge
Suburbs
861,115SF
TheStateofEconomy by theNumbers
GreaterBoston
495SOUTH 1.5MSF
150
INNERSUBURBS 4.8MSF
7%
495NORTH 11.4MSF
120
495WEST 8.6MSF
6%
5%
90
4%
METROWEST 4.8MSF
BOSTON 62.7MSF
60
3%
%Unemployment
3/24SOUTH 1.4MSF
2% 1%
Employment (Millions) 30
128SOUTH 10.1MSF
3.34
3.47
5.5%
138.6
141.6
6.3%
5.8%
4.6%
2014201520142015
2014201520142015
Quarter 2
Quarter 2
128NORTH 10.2MSF
USUnemployment MAUnemployment
USEmployment MAEmployment
CAMBRIDGE 10.1MSF
128CENTRAL 28.1MSF
10.1 1.4
62.7
10.2
28.1
10.1
1.5
4.8
11.4
8.6
4.8
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RISK OF REMAINING IN CITY A As seen from the market overview (available in the link above), City A has limited options for Akamai because it would entail growing into more buildings and attempting to find “pockets” of space to lease as you grow. The two options for large developments that could potentially accommodate the 1.5 MSF that Akamai will need by 2025, are not currently at a stage of permitting that would be in line with Akamai’s timing for a relocation.
28 | DTZ
29 | DTZ
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