BOSTON — Boston continues to stand out as one of the nation’s most active office development markets, leading the Northeast with more than 3.4 million square feet of office space under construction as of June, according to CommercialCafe’s July Office Report.
The report highlights Boston’s resilience at a time when office development nationwide remains subdued. Across the major U.S. markets analyzed, only 29.6 million square feet of office space was under construction in June, making Boston one of the few metropolitan areas where large-scale office projects continue to advance.
Boston and Manhattan together accounted for approximately 21% of all office space under construction in the United States, underscoring the Northeast’s continued importance as a hub for major commercial real estate investment. Boston’s development pipeline led the region with more than 3.4 million square feet underway, followed by Manhattan with 2.9 million square feet.
Investment activity also remained healthy in Greater Boston. Through the first six months of 2026, office investment totaled $618 million, placing Boston among the Northeast’s most active transaction markets. Nationally, Manhattan led office investment with nearly $4.3 billion in year-to-date sales, followed by Dallas at $2.6 billion and San Francisco with $2.4 billion.
While office fundamentals continue to evolve, national vacancy rates showed signs of improvement. The U.S. office vacancy rate declined to 17.7% in June, representing a 170-basis-point improvement from a year earlier. At the same time, average national office asking rents reached $33.67 per square foot, a 2.4% decline compared with June 2025.
Boston remained one of only three U.S. markets—along with Manhattan and Dallas—with more than 2 million square feet of office space currently under development, reinforcing investor confidence in the region despite ongoing uncertainty across the national office sector.
The report also points to a growing trend reshaping office real estate nationwide: adaptive reuse. As office property values remain below historical highs, developers are increasingly converting underutilized office buildings into multifamily housing.
According to Yardi Matrix research, nearly half of all office properties sold since 2024 changed hands at discounted prices, making conversion projects more financially feasible. As a result, approximately 11.8 million square feet of office-to-multifamily conversions have either been completed or are currently under construction in 2025—the highest level on record.
“Recognizing that office conversions can still be an expensive undertaking and difficult to pull off, the fact that a segment of buildings are trading at such a discount creates the opportunity for more conversions to pencil out,” said Peter Kolaczynski, Director of Yardi Research. “At the very least, this allows for creative solutions to be introduced on what to do with this oversupply.”
Although adaptive reuse is accelerating in markets such as Chicago, where discounted office sales have fueled numerous residential conversion projects, Boston continues to distinguish itself through continued investment in new office development rather than large-scale conversion activity.
The latest figures reinforce Boston’s position as one of the country’s strongest office markets, supported by sustained development, healthy investment activity, and continued demand for high-quality commercial space, even as many U.S. markets navigate a changing office landscape.
To read the full report, please click here.
