BOSTON— Boston is emerging as a key driver of office development in the Northeast, with nearly 3.9 million square feet of space currently under construction, according to a new report from CommercialCafe.
The latest monthly office market snapshot shows development activity increasingly concentrated in just a handful of major markets, with Boston and Manhattan accounting for a significant share of the national pipeline. Together, the two cities represent roughly 23% of the approximately 28 million square feet of office space under construction across the U.S.
While Boston leads the region in development, Manhattan continues to dominate in pricing and investment activity. The New York market posted the highest office listing rates in the Northeast in February, averaging just over $73 per square foot, and recorded more than $1.6 billion in sales year-to-date—the highest total both regionally and nationwide.
By contrast, Philadelphia remained the only major Northeastern market with office rents below the national average, with asking rates around $31 per square foot compared to the U.S. average of $32.79.
Nationally, the office sector continues to adjust to shifting demand. Vacancy rates stood at 17.6% in February, down slightly from a year earlier, while listing rates declined by nearly 2% year-over-year. The overall construction pipeline remains modest, representing just 0.4% of total office stock.
In addition to Boston and Manhattan, only a few other major markets—including Dallas and Los Angeles—have more than 2 million square feet of office space under development, underscoring the limited scope of new construction activity.
The report also points to evolving trends in the life sciences sector, a key component of Boston’s office market. After a surge in development following the pandemic, new construction starts have dropped sharply—from 15.4 million square feet in 2022 to just 2.4 million in 2025—creating an opportunity for existing supply to be absorbed.
Despite a slowdown, Boston remains one of the top hubs for life sciences development, accounting for about 20% of the national pipeline in recent years. Analysts say the pullback in new projects could help stabilize the market over time.
“Life sciences development overextended coming out of COVID,” said Peter Kolaczynski of Yardi Matrix. “We’re now seeing investment interest stabilize, even as there is still a glut of newly delivered space.”
In the broader Northeast, Boston, Manhattan, and New Jersey together accounted for roughly 30% of the nation’s office development pipeline in February, highlighting the region’s continued importance despite broader market headwinds.
While leasing activity and construction remain uneven across the country, the report suggests that major gateway markets like Boston are likely to remain central to the sector’s long-term recovery and growth.
To read the full report, please click here.
