The Boston office market continues to face pressure from weak demand and elevated supply. Once a leading force, the life sciences sector remained inactive through 2024, while technology, finance, and professional services have maintained only modest leasing activity. With few large deals signed and a surge of new construction, the market is confronting levels of new space not seen in decades.
Vacancy has climbed to a record-high 14.6%, closely aligned with the 14.1% national rate. This marks a sharp reversal from Boston’s historical outperformance, as vacancy has more than doubled since reaching 6.7% in late 2019. Forecasts suggest Boston’s vacancy rate could surpass the national average by mid-2025.
Office attendance has shown signs of recovery, improving 10.3% year over year—one of the largest gains among major U.S. metros. Still, Boston lags the national average with attendance at 67.4% of pre-pandemic levels. While foot traffic is moving in the right direction, tenants have returned 2.8 million SF of space in the past year, the steepest contraction since 2001. Sublease availability has expanded to over 13 million SF, contributing to an overall availability rate of 18%.
New supply remains a defining challenge. Between 2022 and 2024, 17 million SF was delivered—an unprecedented three-year total—and another 7.6 million SF is expected by 2026. Much of this pipeline is lab-oriented, further compounding pressures in a market already oversupplied with life science space.
Investment activity has slowed dramatically, with 2024 recording the lowest sales volume in 15 years. Only two transactions exceeded nine figures, both involving assets that were largely pre-leased. Liquidity remains tight despite recent rate cuts, and repricing is expected across distressed properties. For landlords, tenants, and investors, now is the time to reassess strategies and position for opportunities in a shifting market. Contact our team today to discuss how current trends could impact your portfolio, leasing plans, or investment decisions.
