Boston – Boston’s office recovery rate is one of the highest in the nation, according to Avison Young’s Second Quarter 2021 Office Insights Report. Biotech and pharmaceutical companies, which are among Boston’s most prevalent occupier industries, have been returning to work at a rate of 46.4%, more than double the national average of 19.2%.
“Lab occupiers were among the first to begin return to work efforts in Boston, likely due to the nature of their industry that doesn’t allow for working remotely,” said Tom Collins, Principal and Managing Director of Avison Young’s New England office. “With bellwether companies also beginning to return to the office and the city’s uptick in tourism, we’re seeing encouraging signs of economic recovery and a revived demand for office space.”
Leasing activity softened since the onset of the pandemic, decreasing by an annual rate of 34.7% compared with the prior 20-year historical average. However, the demand for life sciences space has not waned, commanding a staggering $93 per square foot net effective rent.
“Lab pricing and demand are positioned to remain strong, with the robust pipeline of under construction, conversion and proposed life sciences buildings showing investor’s optimism for this asset type,” said Elaine Wall, the Northeast Data Team Lead for Avison Young. “Lab net effective rents continued to outpace office in the second quarter with an 82.5% differential, a trend that the pandemic has only accelerated.”
Reopening efforts and higher vaccination rates have allowed the Boston unemployment rate to rebound from a high of 15.6% in April 2020 to 5.4% in April 2021.The overall post-COVID recovery rate based on extrapolated cell phone data reached a post-pandemic high of 43.4%, with the Tip O’Neil tunnel rate of recovery achieving 60.5%, an indicator that people are venturing back into the city by driving as opposed to mass transit.