Boston Office Market
Net absorption in the third quarter of 2023 totaled negative 1.1 million SF. Occupancy losses were led by the suburban office market, which will continue to underperform in the near-term with the return of lab buildings to the office inventory. Leasing activity remains sluggish across the Boston Metro, and tenants in the market are acting with little to no conviction. Large transactions are being driven by lease expiration decisions, and there is a flight-to-quality trend taking place throughout the region. Overall vacancy and availability expanded to 18.5% and 23.2%, respectively, during the third quarter of 2023. Tenants remain leveraged in lease negotiations moving forward, while landlords are holding asking rents.Download Boston Office Market Report 3Q23
Boston Industrial Market
While the vacancy rate increased by 50 basis points to 5.5%, the third quarter of 2023 posted a positive net absorption of 100,495 SF. Despite some softening in recent quarters, current demand remains strong at nearly 21.0 million SF, with 1/5 of new active requirements emerging within the last three months. Rents continue to hold, as the overall average asking rate increased by 4.1% to reach a new historic high of $15.69/SF. More speculative, premium quality industrial product is set to deliver during the remainder of the year, which is expected to put some upward pressure on asking rents in the near term.
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