BOSTON— Colliers International released its top office market report for the first quarter of 2019 and said Boston remains the most dynamic market.
Here is the Top Office Markets Snapshot for the first quarter of 2019.
The report takes a look at the top 10 office markets in the U.S. including Boston, and overall found a mixed start to 2019, but office fundamentals remain strong.
For Boston, key highlights include:
- Boston continues to outperform with momentum growing further in Q1 2019. While the heady pace may slow as large tenant requirements come off the table, there is still room to run.
- Boston’s office market is the most dynamic in the top 10, exhibiting strong and sustained forward momentum. Net absorption in Q1 2019 rose to 688,000 square feet and average asking rents broke through $60 per square foot, making them the third-highest in the top 10. Vacancy rate fell once more, down by 30 basis points to 8.9%.
- The three largest leases signed in the first quarter totaled an impressive combined 1.1 million square feet, led by State Street, confirming it will be relocating to a new 510,000 square feet headquarters at 1 Congress Street in the Financial District.
- WeWork also has multiple letters of intent out on spaces that, if signed, would make them Boston’s largest office occupier, ahead of Fidelity. In the meantime, Wayfair has moved to second place after leasing 300,000 square feet at 10 St. James Street in the Back Bay.
- The key question is – how much longer can this activity be sustained? The market may still have room to run but not at such a rapid pace. In addition to State Street, Wayfair and WeWork, several other large tenant requirements have come off the table in recent months, thereby limiting future single/anchor-tenant acticity.
The full report can be viewed here.