Boston Real Estate Market Reports

Boston Office Market

Greater Boston recorded its thirteenth consecutive quarter of rising vacancy, though the pace of increase has slowed significantly. Tenant activity picked up in the first quarter of 2025, with a noticeable rise in tour volume across the region. While overall leasing velocity softened during the quarter, the market saw a modest uptick in new transactions, as more tenants are starting to commit to long-term leases. In Boston’s CBD, active tenant demand was 4.1 million square feet across 166 requirements. The FIRE sector represents the largest share at 37% of total demand. Sublease availability declined by 50 basis points since the start of 2024 as expiring subleases convert to direct availabilities, keeping overall inventories elevated. Face rents remain stable across the region, while landlords continue to offer more aggressive deal terms to secure transactions. Greater Boston’s capital markets are beginning to thaw, with a growing number of owner-user and lender-facilitated transactions emerging.

Boston Industrial Market

Following a second consecutive quarter of negative net absorption, Greater Boston industrial vacancies remain above the 15-year long-term average. Sublease availabilities increased to 3.3 million SF, or 1.5% of current inventory, rivaling cyclical peaks from 15 years ago. Leasing velocity softened during the quarter, and renewals accounted for most of the largest transactions executed during the first quarter of 2025. Industrial vacancies in the South Submarket surpassed 10.0% in the first quarter of 2025 and are now 150 basis points above the metro average. Tenant demand across the region ended the first quarter of 2025 at 16.8 million SF, with select larger big box retailers reengaging with the market. Development remains more measured, with square feet under construction declining consistently throughout the last year. The 1.6 million SF of industrial construction represents just 0.7% of inventory. Despite rising vacancies, asking rents for industrial space remain elevated throughout Greater Boston. At $16.64/SF as of the first quarter of 2025, lease rates are 1.4% higher than year ago levels.

Boston Life Science Market

The life science labor markets remain sluggish, with layoffs persisting and job postings continuing to decline into early 2025. Fundamentals across region continued to unwind this quarter, albeit at a slower pace, with slight increases to vacancy, availability, net negative absorption, and a decline in asking rents. Select submarkets continue to outperform, with the Fenway/LMA being the only submarket to boast a sub 10% vacancy rate. East Cambridge still commands asking rents north of $100/SF NNN. Select subleases are beginning to expire and revert back to the landlords, putting upward pressure on direct availabilities. Following two years of record deliveries, inventory has stabilized, with no new deliveries this quarter and RBA under construction at its lowest level since the second quarter of 2020. Biogen had the most newsworthy transaction of the quarter, committing long-term to a 585,000 SF build-to-suit at the Volpe site in East Cambridge, with plans to consolidate operations. Many landlords of existing and potential laboratory sites are exploring alternative uses, such as office, flex, or multifamily, due to such limited demand in the life science leasing market.