Cushman & Wakefield report finds office leasing remains resilient, industrial demand reaches near four-year high, while life sciences sector continues to stabilize after rapid expansion.
BOSTON — Greater Boston’s commercial real estate market continued to move in different directions during the second quarter of 2026, with office and industrial sectors showing strong leasing activity while the life sciences market continued to adjust following years of rapid post-pandemic growth, according to new reports from Cushman & Wakefield.
The firm’s Q2 2026 Boston commercial real estate reports found that office leasing remained steady, industrial demand reached its second-highest quarterly level in nearly four years, and life sciences companies continued to make strategic long-term decisions despite increased availability across the market.
“Greater Boston continues to demonstrate the resilience that has long distinguished its commercial real estate market,” said Riley McMullan, Senior Manager, Boston Research at Cushman & Wakefield. “Office occupiers remain active across the region, particularly in high-quality space, reflecting continued confidence in Boston’s long-term fundamentals despite ongoing shifts in workplace strategy.”
Office Market Maintains Momentum
Greater Boston’s office market remained among the tightest major gateway markets in the country despite a modest rise in vacancy. Overall vacancy increased by 30 basis points during the second quarter to 19.0%, marking the smallest quarterly increase in more than a year.
Office leasing activity totaled 1.7 million square feet during the quarter, slightly surpassing first-quarter activity and bringing first-half 2026 leasing volume to 3.4 million square feet.
Demand remained broad-based, with eight of Greater Boston’s 19 office submarkets recording more than 100,000 square feet of leasing activity during the first half of the year. While Downtown Boston experienced negative absorption during the quarter, most major market clusters reported occupancy gains, reflecting continued demand for well-located, high-quality office space.
Industrial Sector Continues Strong Performance
The industrial market remained one of Greater Boston’s strongest-performing commercial real estate sectors, with leasing activity reaching 2.0 million square feet in Q2.
The quarterly total represented the second-highest level of industrial demand in nearly four years, behind only the exceptionally strong first quarter. Through the first half of 2026, industrial leasing volume has already more than doubled compared with the same period last year.
Strong tenant demand continued to support pricing, with direct asking rents rising 8.0% year over year to a record $16.06 per square foot. Overall industrial vacancy increased to 12.4% as new supply entered the market.
Life Sciences Market Moves Toward Balance
The region’s life sciences sector continued its gradual normalization following several years of unprecedented expansion. Overall vacancy climbed to a record 34.9%, driven largely by increased availability along the Route 128 corridor.
Direct asking rents moderated to $80.31 per square foot, although Cambridge remained the region’s most expensive life sciences market, with average asking rents of $92.07 per square foot.
Leasing activity totaled approximately 367,000 square feet during the quarter, a slowdown from the strong first quarter. However, renewal activity reached its highest quarterly level since Q2 2025, indicating that many existing life sciences companies continue to commit to the region for the long term.
“The three sectors are moving through different stages of the real estate cycle, but the common thread is that occupiers continue making strategic, long-term real estate decisions,” McMullan said. “Demand for high-quality office and industrial space remains healthy, while the life sciences market continues to establish a more sustainable long-term balance following several years of extraordinary growth.”
Cushman & Wakefield said the latest market data highlights the continued strength and adaptability of Greater Boston’s commercial real estate landscape, with businesses prioritizing quality, location, and long-term value as they navigate evolving workplace and operational needs.
