Cleantech and Commercial Real Estate in Massachusetts
Cleantech has emerged as a vital element in Massachusetts’ commercial real estate market.
As the industry grows, gains funding, and generates jobs, cleantech companies are leasing increasing amounts of space in the Commonwealth. This sector benefits from robust support from local, state, and federal governments, as well as private sector investments and venture capital.
Cleantech as an industry focuses on technological innovations for clean energy and a cleaner environment, aiming for sustainable electric infrastructure and decarbonization. It covers various fields including energy, construction, transportation, and agriculture, offering environmental, economic, and public safety benefits.
Massachusetts is a leader in cleantech, and is now home to the highest percentage of clean energy workers in the U.S., exceeding 100,000 jobs. Since 2020, over 1 million square feet of space in the Greater Boston area has been leased to cleantech companies. The Commonwealth’s commitment to economic incentives and workforce development programs further boosts industry growth.
Factors such as a high-quality workforce, established cleantech clusters, top-tier educational institutions, and high quality of life attract investment. Organizations like NE Clean Energy Council (NECEC), Massachusetts Clean Energy Center (MassCEC), MassEcon, and incubators like Greentown Labs and The Engine enhance Massachusetts’ appeal. To meet greenhouse gas reduction goals, an additional 40,000 clean energy workers are needed by 2030.
Cleantech companies often occupy Industrial/Flex or Life Science buildings equipped with upgraded infrastructure, such as power, cooling, and mechanical, electrical, and plumbing (MEP) systems. Some require significant upgrades, including generators, fume hoods, and explosion-proof fixtures, with tenant improvement costs varying widely.
As of Q4 2023, the metro Boston Industrial market has a 5.7% vacancy rate, with 288.3 million square feet of inventory and asking rents sitting at approximately $15.75/SF NNN. The lab inventory stands at 57.3 million square feet, with a 13.5% vacancy rate and asking rents at $83.97/SF NNN.
For companies seeking cleantech space, it’s advised to engage a professional team early, including architects, engineers, as well as legal and real estate experts. Conducting a thorough needs analysis, understanding MEP specifications, reviewing zoning requirements, and familiarizing oneself with the market and budget are crucial steps. Leveraging real estate expertise for market insights and strategic advice is essential for securing the best solution, not just the lowest price.
Notable Cleantech Company Activity in Massachusetts
For more information, please contact:
Jim Boudrot, Executive Vice President | jboudrot@hunnemanre.com
