Boston Office Market
| Average Asking Rent (Price/SF) | $43.77 |
| Vacancy Rate (%) | 15.5% |
| Net Absorption (SF) | -930,979 |
Conditions failed to improve in Greater Boston’s office market during the fourth quarter of 2022. Metro area vacancies increased for a third consecutive quarter, and occupancy losses surpassed 2.3 million square feet over the last year. Sublease inventories are still rising across the board, with TAMI firms such as Akamai, Akebia, Bullhorn, iRobot and Spotify contributing to the recent uptick in availabilities. At 5.0% of existing inventory, available sublease space across the metro has reached the highest rate since the dot-com recession of the early 2000s. Leasing velocity is 35.0% below pre-pandemic activity and office demand has contracted, with smaller users dominating tenant requirements. Development remains concentrated in the CBD, where close to 80% of metro area office construction is located. Volatility in the region’s life science sector has dampened recent enthusiasm for new laboratory space, resulting in the potential for shadow office supply from shelved or delayed conversion projects.
Download Boston Office Market Report 4Q22Boston Industrial Market
| Average Asking Rent (Price/SF) | $14.89 |
| Vacancy Rate (%) | 3.5% |
| Net Absorption (SF) | 311,349 |
Greater Boston’s industrial market closed out 2022 with consistently strong fundamentals despite facing significant macroeconomic headwinds. Leasing activity rallied from its third quarter deficit and ended the year with 1.7 million square feet of positive net absorption. Landlords remained bullish on rents, as the overall average asking rate realized a 12.3% uptick over the year. Several properties that experienced extended construction timelines delivered in the fourth quarter of 2022, providing much-needed supply to an otherwise tight market. The spike in deliveries caused overall vacancies to stabilize above 3.0% as well as quoted rents for the Class A Warehouse/Distribution subtype to decline. Demand continues to outpace supply for quality industrial product, which bodes well for the long-term health of the market. Capital markets felt the impact of interest rate volatility and investor uncertainty during the fourth quarter of 2022, as the average per-square-foot sales price dipped below $200/SF for the first time since the third quarter of 2021.
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