BOSTON–Avison Young’s latest Data Bite market intelligence indicates that Greater Boston suburban offices are trading below values recorded nearly 20 years ago. Trades logged an average PSF value of $124 in the fourth quarter of 2024; in the final quarter of 2005, that value was recorded at $136.
Here are some other highlights from the Avison Young report:
- Between 2020 and 2023, the post-COVID lab boom drove record-high PSF averages. Office property transactions intended for conversion to life science further inflated these averages, leading to an artificial boost in PSF figures.
- As the suburban office market moves through a correction phase, new property owners are evaluating their recent acquisitions with adjusted expectations, underwriting them at discounted rental rates to align with evolving market conditions.
- Key transactions in 2024 include 199 & 201 Riverneck Rd (Chelmsford), 200 Innerbelt Rd (Somerville), and 1200 Crown Colony Dr (Quincy), which all traded at over a 40% discount from their previous sale value. Given the steep drop in building pricing, investors have adopted a more aggressive outlook when pursuing new acquisitions.
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