Boston Office Market on the Road to Full Recovery, Says CBRE

Lauren Lipscomb

Boston—While the Covid-19 Omicron variant slowed the return to office momentum, Boston office market leasing remained steady at 700,000 sq. ft. thanks to two large commitments for over 100,000 sq. ft., according to CBRE’s industry-leading Figures Report for Q1 2022. Asking rents closed Q1 up more than $2.14 per sq. ft. at $70.16 per sq. ft. gross. The market experienced robust leasing activity in mid-size deals (10,000 – 40,000 sq. ft.), while the sublease market recorded strong results, as it has been during the last several quarters. However, the Boston market posted slightly negative net absorption in the first quarter of 46,000 sq. ft.“Despite a slight blip, Boston’s office markets remain on the path to recovery,” said CBRE’s Lauren Lipscomb. “The two transactions of 100,000 sq. ft. signed by major tenants during the quarter speak to the market’s overall strength and how large active tenants are once again engaging in the market for their corporate space requirements.”The market’s Central Business District (CBD) posted its third consecutive quarter of positive absorption of 62,000 sq. ft. Class A asking rents rose from the previous quarter to end Q1 at $77.47 per sq. ft., while overall the asking rent was $74.08 per sq. ft. The largest transaction in the CBD during the first quarter was Cambridge Associates’ 116,000 sq. ft. lease at Winthrop Center, the first tenant to sign in MP Boston’s new tower set to be delivered in 2023.Boston’s Back Bay submarket saw overall average asking rents climb to $71.64 per sq. ft., while rents for Class A space increased by $1.04 per sq. ft. to close the quarter at its pre-pandemic level of $75.19 per sq. ft. Leasing activity in Back Bay was characterized mostly by subleases. The two largest transactions in the submarket were Phaidon International and TA Associates. Both companies subleased 15,000 sq. ft. at 200 Clarendon Street. The Seaport submarket recorded both availability and vacancy declines during Q1. The availability rate dropped to 11% and the vacancy rate declined to 8.5%, thanks to 44,000 sq. ft. of positive absorption. Importantly, the Seaport’s sublease availability decreased 110 bps to just 2.6%.  The largest transaction in the Seaport submarket during Q1 was Nimbus Therapeutics’ 30,000 sq. ft. sublease from Akcea at 22 Boston Wharf Road.