BOSTON – Greater Boston’s office market capped off a solid 2017 with a strong fourth quarter, posting one million square feet of positive absorption for the year, including 183,000 square feet during the final frame.
The high absorption pushed vacancy to a near-record low of 11.9 percent, from 12 percent last quarter. The findings were released in Transwestern’s “officeSTATus – Q4 2017” report.
“The region’s office market posted positive absorption in three of the four quarters last year, which is a sign of a robust market,” said Chase Bourdelaise, Managing Director of Research and Analytics. “We anticipate continued growth, particularly given the construction pipeline for office space. While there was approximately 1.2 million square feet of office space delivered in 2017, there is an additional 3.4 million square feet expected over the next few years.”
Highlights from the report include:
- Boston Central Business District had 195,000 square feet of positive absorption in fourth quarter, pushing vacancy down to 8.2 percent.
- Bose Corp. leased 98,000 square feet at Boston Landing, the latest in the trend of suburban tenants leasing in the urban core.
- The Cambridge market remained steady with zero absorption and vacancy holding at 4 percent.
- East Cambridge remains the region’s hottest office market with vacancy down to just 2.9 percent and average Class A asking rents up to $82.51 per square foot.
- The Route 128 market saw vacancy drop to 12.8 percent on 91,000 square feet of positive absorption.
- The 96,000 square feet of negative absorption in the 34.2 million-square-foot Interstate 495 market nudged vacancy up slightly to 19.3 percent, though it’s comfortably below the five-year average of 20.6 percent.