By Grant Welker
Boston Office Market Showing Early Signs of Recovery
Two key metrics suggest Boston’s office market may be turning a corner. Vacancy rates in the city have declined for the fourth consecutive quarter, and leasing activity has reached its highest level since 2019.
According to JLL, the city’s office vacancy currently stands at 21.1%, while the broader metro area sits at 22.9%. Although still roughly double pre-pandemic levels, these figures reflect steady improvement. Over the past 12 months, 500,000 square feet of office space has been leased, reversing a trend of widespread negative absorption experienced throughout most of the pandemic period.
Several major corporate moves highlight the market’s momentum. Lego relocated its U.S. headquarters from Connecticut to Boston, occupying over 157,000 square feet, and Klaviyo expanded its footprint to 256,000 square feet. Analysts note that companies are no longer giving up office space at the high rates seen in previous years.
Boston’s recovery is supported by a diverse tenant mix, particularly industries with traditionally higher office space demands, such as finance, insurance, legal, and real estate. However, given the city’s 69-million-square-foot office inventory, significantly more leasing activity will be needed to bring vacancy rates closer to pre-pandemic levels.
In summary, Boston’s office market is showing signs of stabilization, but the pace of recovery will need to accelerate to fully regain pre-pandemic strength.