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 4Q20
Boston Industrial Market
| Average Asking Rent (Price/SF) | $9.94 |
| Vacancy Rate (%) | 5.6% |
| Net Absorption (SF) | 1,355,294 |
Greater Boston’s industrial market continues to heat up as another quarter closes with impressive fundamentals. Overall asking rents increased 9.7% on a year-over-year basis, and total vacancy dropped 40 basis points to a historic low of 5.6%. Annual industrial investment, totaling $2.6 billion, was 35.8% higher than 2019’s volumes. A flurry of activity took place at the end of 2020, with nearly half of total volumes closing during the fourth quarter. Leasing activity remained strong; even with 2.2 million square feet of deliveries throughout the year, only a handful of large blocks remain available.
