BOSTON–Boston’s office market is showing early signs of stabilization after several years of post-pandemic recalibration, according to Avison Young’s newly released Q4 2025 Boston Office Market Report.
Stronger leasing activity, rising expansion demand, and a rebound in investment sales signal a potential turning point for the region’s office sector.
According to the report, 2025 was marked by renewed confidence among occupiers, with firms increasingly willing to renew leases, expand their footprints, and make longer-term real estate decisions. While the recovery remains uneven across submarkets and asset classes, the report notes that the foundation for a healthier office market is beginning to take shape.
Leasing Activity Reaches Post-Pandemic High
Leasing activity across Greater Boston reached its highest annual total since 2019, continuing a three-year upward trend. Expansions climbed to a ten-year high, accounting for approximately 10% of all leasing activity, as companies adjusted to higher office utilization and the gradual return of employees.
Downtown Boston led the region’s recovery, driven largely by demand for top-tier assets. Trophy and Class A buildings accounted for more than 75% of all Downtown Boston leasing activity in 2025, significantly outperforming Class B and C properties, which continued to face softer demand.
Class A buildings downtown generated more than 2.9 million square feet of leasing activity during the year, followed by Trophy assets with over 1.2 million square feet, reinforcing the market’s ongoing flight to quality.
Submarket and Sector Divergence Persists
Rent performance varied widely by submarket. The report notes that finance-heavy areas such as Back Bay and the Central Business District have surpassed pre-pandemic strike pricing, reflecting stronger tenant demand and limited availability of high-quality space.
By contrast, tech- and life science-oriented markets including East and Central Cambridge remain below 2019 rent levels. The report attributes the slower recovery in these areas to funding cuts, overbuilding, and elevated vacancy tied to lab and tech-focused development.
Industry trends also shaped leasing activity. The report highlights that finance, insurance, and real estate firms carried Downtown Boston leasing in 2025, while law and technology sectors also posted strong activity, including expansion driven by artificial intelligence. Biotech and pharmaceutical office leasing, however, fell to a ten-year low.
Capital Markets Show Signs of Recovery
Investment sales activity rebounded in 2025, with average office sale prices across Greater Boston rising to $232.83 per square foot, up from the 2024 low of $187.90 per square foot. According to the report, the increase was driven in large part by higher transaction volume in Downtown Boston, signaling a possible inflection point in the capital markets.
Buyers largely focused on Class A properties, taking advantage of discounted pricing to add high-quality assets to their portfolios. While most sales occurred in the urban core, several large suburban transactions also contributed to the year’s improved volume.
Tenant-Favorable Conditions Remain
The report also notes that the gap between net effective rents and strike pricing in Downtown Boston plateaued in 2025. While still elevated by historical standards, the gap continues to benefit tenants, as high concessions remain available in many deals.
While challenges persist—particularly in Cambridge and the inner suburbs, where new construction has outpaced demand—the report concludes that 2025 marked a meaningful step forward for Greater Boston’s office market. Increased leasing confidence, a rise in expansions, and renewed capital market activity suggest the region is moving toward a more stable footing heading into 2026.
