Boston Office Space Demand 24% Above Pre-Pandemic Level with Life Sciences Tenants Leading Demand

Nicole LaRusso

Boston—Boston is the U.S. leader in pandemic-era office market performance, ranking first in the recovery of office demand, according to CBRE’s monthly “Pulse of U.S Office Demand” report.

To gauge the pace of recovery, CBRE measures three indices for the 12 largest U.S. office markets. These indices measure office market activity each month and provide early indications of when and where momentum in office demand may be shifting, both nationally and for each of the 12 markets. The report examines tenants-in-the market (TIMs) activity, which tracks companies actively seeking office space; leasing activity in the form of finalized lease agreements; and sublease availability.

Overall, Boston was the U.S. leader in pandemic-era office market performance in August.

“Demand for office space remained stable last month with life sciences tenants playing a major role,” said Nicole LaRusso, Senior Director of Research and Analysis, CBRE. “Despite a resurgence in new Covid infections, Boston was still the top-performing market in the country, something we believe will continue for the remainder of 2021.”

The August edition of the report published today found that Boston has fared well in the TIMs index, while it experienced a pause in overall leasing activity, but a decline in sublease activity. For each index, a reading of 100 equates to pre-crisis conditions of 2018 and 2019.

Boston’s TIMs index of 124 was 24% above the baseline level. Boston ranks first in the recovery for tenant requirements, 41 points above the U.S. average of 83. The index decreased by 1 point from July 2021 and has consistently performed at or above pre-pandemic levels throughout 2020 and 2021.

With a Leasing Activity Index of 84, Boston dropped 16 points below the pre-pandemic baseline level in August. Even so, Boston ranked fourth overall, 13 points ahead of the U.S. average of 71. The Boston leasing index has consistently outperformed throughout the pandemic and has averaged 102 throughout 2021.

At 158, the volume of available sublease space was 58% above the pre-pandemic baseline. Boston ranks third among the 12 markets in terms of available sublease space, 33 points below the U.S. average of 191. Boston has recorded seven consecutive monthly declines in its sublease index, down 26 points from its peak of 184 in January 2021.

To read the full report, click here.