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Q3 2015 Boston Office Market Update

Boston's office market remained strong in Q3 2015. Overall vacancy in the Boston area decreased to 9.1%, down from 9.2% at the end of Q2 2015 and 9.3% at the end of Q4 2014. Vacancy in Boston's central business district (CBD) was down to 7.6%, compare that with Q4 2014 when vacancy was at 8.3%. Interestingly, the vacancy rate for Class A properties is at 9.9% vs. only 5.2% for Class C properties. Rents are also up - in both Boston's CBD and the suburban markets.


There has been a lot of press about the construction boom in Boston. In the first chart above, showing scheduled deliveries of new construction office space, note that most of it has already been leased. One common question is whether it is just companies moving out of old space into new and so it will create vacancy in their old building. However, that has not yet been the case - more office space continues to get leased than sits on the market (net absorption for Q3 2015 was positive 1,152,407 SF).

Investment interest in Boston office property also remains strong. Cap rates continue to stay below national averages. Investors are also dominating the market, as only 7% of Boston's office space is owner-occupied.

Contact Eric Shabshelowitz, our Vice President of Commercial Real Estate, if you have any questions about or need help with Boston office space.

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