Boston– CBRE released its Boston Office MarketView for the fourth quarter of 2019.
In the Boston office market, asking rents reached $67.41 per sq. ft., making the year-over-year growth almost 10%. The Boston office market saw 113,000 sq. ft. of positive absorption during the quarter, bringing the yearly total to more than 1.9 million sq. ft. Vacancy continued to decline, dropping 20 basis points to 6.7%. Availability increased to 13.7% a result of new supply being added to the market.
There is currently 5.1 million sq. ft. of new construction underway, with almost 4 million sq. ft. set to be delivered between 2021 and 2023 with another 5 million sq. ft. shovel ready or in the planning stages.
“Until new construction is delivered in the next two years, we expect Boston office rents to continue to rise as supply is tight as there are very limited options for large requirements,” said Suzanne Duca, Director of Research for CBRE New England.
Central Business District: The CBD had several large blocks become available in the fourth quarter, posting 371,000 sq. ft. of negative absorption. Class A rents continued to increase at a steady clip, rising more than $2.00 per sq. ft. to $76.56 per sq. ft., a new high watermark.
Back Bay: Asking rents in the Back Bay continued to climb in the fourth quarter, hitting $71.28 per sq. ft., a new high for the submarket. This represents 8% growth in the last 12 months, and a nominal jump quarter-over-quarter. Class A rents continue to rise, reaching a new high at $77.09 per sq. ft., a 10% growth in the past year. Vacancy rose slightly to 3.2% as leasing activity was nominal and several spaces were returned to the market.
Seaport: The Seaport had a particularly strong second quarter with 378,000 sq. ft. of positive absorption. Asking rents increased to $68.17, up more than 16% in the last two years.