Douglas T. Linde
President and Director at Boston Properties
Good morning, everybody. So Owen noted that our leasing in 24 through the end of the third quarter is 25% higher than 23, and during this period, we have completed 3.3 million square feet of signed leases. Post Q3, our active pipeline of leases under documentation sits at 1.53 million square feet as compared to 1.39 million square feet post the second quarter. We've done about 315,000 square feet of that pool since October 1st, executed leases. If we execute most of the remaining leases during the fourth quarter, we will end the year at over 4.5 million square feet of transactions. Our January 24 guidance assumed 3.5 million square feet. Exclusive of our leases and documentation, we also have additional transactions under discussion totaling just over 1.5 million square feet in the pipeline that will seed our 2025 activity. About 50% of that involves currently vacant space.
As of September 30th, we have 1.04 million square feet of signed leases on vacant space that has not yet commenced. There is now a 210 basis point difference between our occupied space and our leased space. No doubt the analyst community is looking keenly towards 2025 and 2026 occupancy.
We will provide our occupancy guidance for 25 on our next call. However, we can provide the following inputs as you think about your own model. Our Q4-24 and full year 25 expirations total 3.7 million square feet. We have signed leases that we will recognize revenue on of 476,000 square feet during the fourth quarter of 24 and 483,000 square feet for 25, totaling 959,000, which creates an uncovered exposure, if you will, of 2.74 million square feet. Our pipeline of leases in negotiation covers an additional 305,000 square feet of currently vacant space and 395,000 square feet of renewals, all of this set to commence in 24 and 25. Obviously, the remainder involves early renewals with expirations after 25.
This leaves pro forma revenue commencing leasing for the next five quarters of about 2 million square feet for us to be flat for the in-service portfolio. Additional leasing with revenue starting in 25 will be additive. Each of our regional EVPs are in the process of building their business plans for 25, and this will be the basis for the total leasing volumes embedded in our guidance when we talk to you next time.
If you're wondering about the large known 24-25 expirations, which is often a question we get, the largest are 312,000 square feet at Weston Corporate Center, which has been leased by Biogen but sublet for years, 200,000 square feet at 1,000 Winter Street in Waltham, 350,000 square feet at 205th Avenue, we own 28% of that, two 70,000 square foot law firm leases at Embarcadero Center, and 260,000 square feet at Weston Corporate Center, which is leased to the GSA.
This last building is the site for our next multi-phase development in Weston Town Center, and the building will be taken out of service on January 1st, 25. We also have active developments that will be added to our in-service portfolio in 25 with availability that is noted in our supplemental materials, 360 Park Avenue, South, 651 Gateway, and Reston Next Phase II. Our BXP regional teams are spending a lot of energy pursuing alternative uses for our suburban land portfolio, which includes vacant office buildings, for which the highest and best use may not be waiting for a recovery in office leasing.
We are now deep in a public re-permitting process for 17 Hartwell Avenue in Lexington to allow for 312 multi-family units. A similar process is underway for our site containing two office buildings at Worldgate and Herndon, Virginia, where we are working on a rezoning for 359 units and 99 townhomes, and the Shady Grove Office Park in Rockville, Maryland, with the first phase including 360 multi-family units and 136 townhomes. Additional land sites in the Bay Area, Waltham, Northern Virginia, and Northern New Jersey are being actively evaluated.
This quarter, we took two buildings out of service that we will work to re-entitle, one in Waltham and one in Northern Virginia. During our last call, I explained that we would see up to a 40 basis points decline in our occupancy for Q3 due to the addition of our partially leased development at 180 city points. Owen noted that.
With a slight reduction in the in-service portfolio, we only experienced a 10 basis points deterioration ending the quarter at 87%. We expect to improve by 20 to 30 basis points during the fourth quarter in spite of the delivery of 103 city points, which is 100% available. This quarter, we completed 74 transactions with 32 lease renewals for 681,000 square feet and 42 with new clients encompassing 427,000 square feet.
Activity was concentrated in Boston with more than 58% of our total leasing volumes. We completed 647,000 square feet in Boston, 143,000 square feet in New York, 155,000 square feet in DC, and 163,000 on the West Coast. Ten clients expanded into 142,000 additional square feet, and we had four contractions totaling 100,000 square feet.
The majority of the client expansions this quarter came from our back-based financial firms. The only significant contraction in the portfolio came from a tech company downsizing in Waltham. They were about 70,000 square feet and went to 15, and we have released all of the space that they vacated. We continue to see downsizing of our legal firm clients on the West Coast and in DC, and we experienced one in Embarcadero Center, which was a renewal and downsizing this quarter. We executed only one transaction over 55,000 square feet and two others in excess of 45,000 square feet. Our leasing activity this quarter was very granular.
As reported in our supplemental, the mark-to-market of the leases that commenced this quarter, so they may have been signed in 20 or 21 or 22 or 23, 900,000 square feet was down about 4.5%, and the transaction cost averaged $11.83 per year compared to about $11 last quarter. The overall mark-to-market of the starting cash run on leases executed this quarter of the 1.1 million square feet relative to the previous in-place cash runs was actually up 9% with the primary contribution coming from the Boston area. The starting cash runs on leases we signed during this quarter on second-generation space were up 19% in Boston, 10% in New York, and then down 11% in DC and 3% on the West Coast.
Owen's comments about the state of the economy and the zeitgeist around the importance of in-person work with colleagues is translating into improvements in leasing activity. The level of improvement and the source of the incremental demand continue to vary greatly by market. I would also note that decision-making continues to be slow, and while more transactions are being completed, the process takes time, lots of time.
Our views this quarter are pretty consistent with the commentary we provided during 24th. The submarkets with the largest concentration of users from financial institutions, alternative asset managers, professional service organizations, and law firms are showing the most consistent pickup in activity. And as we saw this quarter, in some circumstances, these clients are expanding absorption of space. Concessions are flat, and taking market rents have risen during the year. So, if we think about New York City, the sub-8% availability in the Park Avenue submarket is a direct reflection of these users growing and competing for limited blocks of space. We have no availability at 399 Park Avenue or 601 Lexington.
When clients need to expand in these buildings, we proactively discuss possible terminations with their neighbors. While 599 Lex has always been not quite Park Avenue, in strong markets like this, the building is one of the first to experience the spillover of Park Avenue tenants that are unable to find space. We are now in lease with a Park Avenue tenant that was unable to grow in its current building for a couple of floors.
Our most active building in New York during the quarter was the General Motors building. We completed 58,000 square feet of transactions, including the addition of a new private equity client and the expansion of another. Our other availability in this market is at 510 Madison, where we are in the middle of an amenity refresh. This building tends to lend itself to smaller financial firms, given the 12,000 square foot floor plate. This particular market segment of demand has been slower to make decisions. Year-to-date, leases executed by technology tenants in Manhattan has still been pretty light.
We have seen a pickup in activity among technology tenants touring the market, and this is encouraging given our current availability at 360 Park Avenue South and the availability we will have at 205th Avenue. We are in active conversations with tenants at both buildings, but none have progressed to a lease in negotiation. The most active building in Boston, as well as in the entire BXP portfolio during the quarter, was 200 Clarinet Street. We completed more than 460,000 square feet of leases. Virtually all the leases were with existing clients in the alternative asset management industry, and 50% of those clients added additional space. We also completed over 116,000 square feet of leasing in our Boston Urban Edge portfolio.
This was made up of eight separate transactions and seven were with new clients for BXP. Our portfolio is uniquely positioned, both in terms of quality and availability of capital, for investment in new tenant installations. Here the demand came from a national retailer, a few life science companies with office requirements, a small technology firm, and a fund manager. We didn't execute any leases in our new life science developments this quarter. Life science clients in Greater Boston continue to display very little urgency about any potential new requirements or relocations. We have had tours from some larger users, but the requirements are for late 26 and 27 occupancy.
Year to date, there have been a handful of leases signed on shelf space that total about 300,000 square feet in the markets outside of Cambridge and Boston. Our Reston portfolio was responsible for 55% of our executed leases during the quarter in the DC region. Leasing activity and tenant demand growth continues to come primarily from two industry areas, cybersecurity and defense contracting. This quarter, we had a growing cyber firm, more than double its square footage. This client signed its initial lease in Reston Town Center for 9,000 square feet in 2020 and has grown six-fold in the last four years. One of the great advantages of BXP's large holdings in Reston is our ability to accommodate the growth of our clients.
We saw a pickup of smaller requirements in our CBDDC portfolio this quarter, which was good news. We had two clients expand, one at 2210 and another at Capitol Gallery, and completed leases with two new customers at 1330 Connecticut Avenue. The district's private sector tenant demand continues to be dominated by the legal industry.
Many of these potential law firm clients are not satisfied with the existing inventory, either due to the product quality, condition, or the asset's financial condition. While in almost every case, the law firm renewal or relocation is resulting in a smaller requirement, which is leading to negative absorption, these firms prefer to be in the top refurbished, amenity-rich, well-capitalized buildings, which is creating a tight micro-market. There are limited opportunities in the market and no appetite from traditional lenders to finance any new construction, which has traditionally been the outlet for law firm lease expiration.
Our availability at 2210 and 901 New York Avenue will fare well, and we are actually in lease documentation for a late 2026 known expiration at 2210 today. The San Francisco CBD also continues to act as the financial center of the West Coast with its own set of asset managers including private equity, venture, hedge funds and specialized fund managers and their financial and legal advisors. This is the source of the bulk of the transactions in the market today from a leasing perspective.
Tour activity from these non-tech clients has improved during the year. On a comparative basis, San Francisco is seeing much more demand in 24 than it did in 23. There continue to be lots of small clients actively looking for space and we are seeing these deals at 535 Mission and Embarcadero Center. We have completed our negotiations on five leases totalling about 40,000 square feet at 535 Mission. This will cover a third of the availability of the building, but we still have another 80,000 square feet to go.
And Embarcadero Center, we are in discussions with a number of existing and potentially relocating law firms. In each case, the requirement is a downsizing relative to the current footprint. We will retain the majority of our clients, albeit with space reduction. We are adding other new customers, but the transaction sizes are small, so gaining occupancy takes time. Additional lease reductions from larger tenants upon lease expiration in the market, J.P. Morgan is the latest which is stemming from their acquisition of First Republic, continue to mute the positive demand emanating from the AI organizations that continue to look for additional space.
During the quarter, the market got the long-awaited announcement of OpenAI's 300,000-square-foot expansion in Mission Bay. And it's great that Airbnb renewed their headquarters at 888 Brannan, but expansion requirements from large technology tenants are still sparse in San Francisco. Tenant tour activity is improving at our Mountain View Research R&D buildings, where we have about 215,000 square feet of vacancy and it's a uniquely attractive product. We are in lease for 26,000 square feet with a healthcare diagnostics company for a vacant building.
We completed a renewal with an automotive company and recently have issued a multiple full building proposal. This is a significant improvement from last year and from last quarter. These buildings are designed for companies that are making some kind of device, be it a car sensor, a photovoltaic panel or a medical device. They don't compete with the large, multistory office product that has flooded the market.
In summary, 2024 is shaping up to be a better-than-expected year relative to overall leasing at BXP. Leasing in our development properties continues to lag, but these are some of the highest-quality workplaces in their respective markets and they will lease. We may not be in a clear, positive absorption market, but demand continues to grow and we will continue to gain market share. Mike