BOSTON— Despite early-year disruptions from nationwide pharmacy closures, Boston’s retail market remains one of the most stable in the country, according to the newly released Q3 2025 Boston Retail Market Report from Marcus & Millichap (NYSE: MMI).
While the metro area experienced a modest uptick in retail vacancies, reaching 3.3%, it continues to boast the second-lowest vacancy rate among major U.S. retail markets. The report credits strong demand in Boston’s urban core and steady investor interest as key stabilizing forces.
“Boston’s retail market faced early-year disruption from national pharmacy closures, yet strong urban demand continues to anchor long-term stability,” said Thomas Shihadeh, Vice President and Regional Manager in Marcus & Millichap’s Boston office. “The third quarter highlights the resilience of the metro’s core, where high incomes and mixed-use growth are sustaining retail performance despite suburban softness.”
Key Findings from the Q3 2025 Report:
- Vacancy Rate: Rose to 3.3%, up 50 basis points year-over-year. The increase stems largely from pharmacy closures, with over 1 million square feet vacated in the first half of 2025 by major chains including Walgreens, CVS, and Rite Aid.
- New Retail Deliveries: Just 108,000 square feet of retail space was completed over the past 12 months — the lowest annual delivery total on record for the Boston metro.
- Rents: The average asking rent rose 1.6% year-over-year to $22.32 per square foot, aligning with the metro’s long-term average growth pace.
Investment Activity: Transaction velocity increased by 15% over the past year, with investors particularly focused on high-traffic urban corridors and areas along Route 128 North, where supply remains tight and consumer demand is strong.
Fundamentals Remain Strong
Shihadeh noted that despite short-term turbulence in parts of the market, Boston’s underlying fundamentals — including a constrained supply pipeline and high household incomes — continue to attract both retailers and investors.
“Even amid short-term headwinds, Boston’s fundamentals remain among the most stable in the nation,” he added. “Tight supply, resilient tenant demand, and steady investor activity position the metro for continued strength heading into year-end.”
The report suggests that Boston’s blend of affluent urban demographics, dense mixed-use developments, and low new supply will likely continue to support performance, even as national retail trends remain mixed.
