Boston Office Market
Renewals and extensions continue to outperform other lease types, highlighting tenants’ cautious approach to committing to new spaces in the current market environment. Following historically low levels in the first half of the year, leasing activity rebounded this quarter, totaling 2.6 million SF. The second half of the year outpaced the first by an additional 1.0 million square feet. Landlords continue to examine other development opportunities in Greater Boston, highlighted by local governing initiatives and redevelopment opportunities. Capital markets in Greater Boston are beginning to show signs of increased liquidity. While transaction volumes remain below historical averages, improved clarity on expectations has spurred a gradual uptick in activity.
Download Boston Office Market Report 4Q24Boston Industrial Market
Despite below-average metro area unemployment, local job growth in most industrial-using sectors remained stable over the last 12 months. Industrial vacancy rates for Metro Boston increased for the eleventh straight quarter, reaching a new historic high of 8.2% in the fourth quarter of 2024. The Urban submarket remains the most supply constraint, continuing to boast comparatively low availability as well as the highest average asking rents. The Class A Warehouse subtype experienced limited leasing velocity as users remain focused on the smaller blocks of industrial space, resulting in 2024 recording the lowest leasing volume in the past 10 years.
Download Boston Industrial Market Report 4Q24Boston Life Science Market
Layoffs persist in the local life science sector and employment growth will likely remain subdued throughout much of the next year. The supply-imbalance continues to weigh on laboratory vacancy across Greater Boston, which has increased for a ninth consecutive quarter. While tenant demand remains elevated at roughly 1.9 million SF, several of these requirements are subject to additional funding or are on hold. Recent interest rate cuts bode well for demand drivers, but have yet to improve investor interest in laboratory assets.