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.

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