There is light at the end of the tunnel, as more than one million Massachusetts residents have been fully vaccinated. While certainly a far cry from pre-pandemic levels, activity in Boston is picking up, with more foot traffic in the city. Physical occupancies remain low but are improving little by little. First quarter stats show an apparent settling of the market. Negative absorption continued, the amount of sublease space has begun to stabilize, and asking rents declined for the first time this cycle. Vacancies ended the quarter at 15.7%, a seven percentage-point increase from one year ago.
The office market in Cambridge and the suburbs is showing mixed signals. Absorption was mostly flat in Cambridge quarter-over-quarter, with 27,000 square feet of negative absorption. In the suburbs, 123,000 square feet was absorbed in the first quarter. While ZoomInfo agreed to take 226,000 square feet in Waltham, IBM is leaving its roughly 500,000-square-foot campus in Littleton. Vacancies at 10.2% in Cambridge and 18.1% in the suburbs are up 3.8 and 1.6 percentage points, respectively, over the past 12 months. Office demand remains restrained, while lab/life science is stealing the headlines. Sublease space availability declined, ending the quarter at a combined 3.4 million square feet, down nearly 200,000 square feet since year-end; both Cambridge and the suburbs saw a quarterly decline.
