Boston Office Market
| Average Asking Rent (Price/SF) | $40.57 |
| Vacancy Rate (%) | 14.6% |
| Net Absorption (SF) | 316,057 |
While one quarter certainly doesn’t make a trend, the Greater Boston office market posted positive fundamentals for the first time since the start of the pandemic. Vacancies declined 50 basis points over the quarter as more than 300,000 square feet of office space was absorbed. Sublease inventories are abating as well, decreasing by more than 1.0 million square feet in the third quarter. Tenant activity is picking up, despite uncertainty surrounding flexible work arrangements and recent commitments from homegrown tech companies, including HubSpot and Pegasystems, point to the continued need for physical space among office users. Asking rents are trending upward across the metro, surpassing $40.00/SF for the first time, while growth in effective rates still lags. The impact of the region’s booming life science sector on and the interplay with the local office landscape cannot be emphasized enough. With laboratory demand inundating the marketplace, developers remain focused on purpose-built space as well as conversion projects, resulting in another 1.4-million-square-foot reduction in the metro’s office inventory, nearly all located in Boston’s suburbs, in the third quarter alone. Boston’s emergence as a global destination for capital, particularly for alternative assets, continues to drive immense liquidity in the region, as well. Overall, Greater Boston’s office market is heading toward more normalcy, despite current challenges from COVID-19 variants and delays in return-to-office plans. However, expectations for an uneven recovery remain high and more stable market conditions may not take hold until at least 2022.
Download Boston Office Market Report 3Q21Boston Industrial Market
| Average Asking Rent (Price/SF) | $11.41 |
| Vacancy Rate (%) | 5.1% |
| Net Absorption (SF) | 242,253 |
Greater Boston’s Industrial market remains hot as another quarter closes with solid fundamentals. Overall asking rents continued to rise, increasing by 5.1% since the end of Q1 and 17.0% compared to year-ago levels, finishing at $11.41/SF NNN. Total vacancy declined 10 basis points to a new historic low of 5.1%, a 70 basis point decline year-over-year. Net absorption remained in the six-digit territory, adding 242,253 square feet, pushing the year-to-date number to over one million square feet in just the first half of the year. Although leasing activity remains strong, the lack of available, quality product could impact net absorption gains in the near term. The R&D/Flex subtype witnessed an impressive decline in vacancy, falling to 6.7%, representing a nearly 80 basis point decrease since the beginning of the quarter. Vacancies in the Warehouse/Distribution and General Industrial subtypes remained stable as well. Investor interest remains robust, with more than $900 million in assets changing hands in the second quarter, a $170 million, or 23.3%, increase over last quarter.
Download Boston Industrial Market Report 2Q21 Download Boston Life Sciences Market Report 2Q21