Boston Office Market
| Average Asking Rent (Price/SF) | $38.91 |
| Vacancy Rate (%) | 14.0% |
| Net Absorption (SF) | -1,102,218 |
Following a banner year of activity, 2020 proved to be challenging for Greater Boston’s office market. While trends were less negative during the fourth quarter, the metro ended the year with more than negative 4.0 million square feet in net absorption, which represents the largest annual decline in more than 15 years. Sublease inventories increased by another 1.0 million square feet over the quarter and now represent 4.5% of total office inventory. Vacancies have breached 14% for the first time since the last downturn and asking rents are starting to soften – particularly in the CBD. Leasing remains limited as many tenants continue to exercise caution in their decision-making. As a result, 2020’s velocity is down by more than 60% from last year’s totals. Fewer transactions took place during the second half of the year, with renewals and extensions accounting for a large share of recent volumes. Despite fewer observations, the average lease term declined by 24% over the course of the year. Landlords continue to reposition competitive office product for life science users and inventories have declined by roughly 2.0 million square feet since the end of last year. Nearly a year into the pandemic and uncertainty still surrounds remote work and future space needs; however, Greater Boston’s economy is more diversified than ever, and the region remains a global hub for innovation, healthcare, life science and education.
DOWNLOAD BOSTON OFFICE MARKET REPORT 4Q20Boston Industrial Market
| Average Asking Rent (Price/SF) | $9.53 |
| Vacancy Rate (%) | 5.8% |
| Net Absorption (SF) | 788,355 |
While the success of Boston’s booming industrial market pre-dates the COVID-19 pandemic, the last few months have given way to a stronger market that has garnered the attention of all investor profiles. Demand is surging, as the 15-plus million square feet of active requirements is close to surpassing the 18.0 million square feet of existing available inventory across Greater Boston. Developers are doing their best to stay ahead of demand, as almost every remaining usable parcel within the market has been considered. GMP manufacturing, a relatively new source of demand, remains a significant driver of market growth. Demand by very large users (500,000 SF+), are pushing the boundaries of the metro into Worchester County and Southern New Hampshire; and as more urban industrial continues to be converted for higher and best use, inventory in South Boston, Cambridge, and the like, is close to extinct. Rents have continued to increase with significant pace and year-to-date absorption has reached nearly 2.1 million square feet as all industrial fundamentals continue to improve.
