There are signs of recovery emerging across the Greater Boston market. Absorption was positive in Boston, after six consecutive quarters of space givebacks. Sublease space decreased sharply, by 773,000 square feet in the quarter, while vacancies fell to 15.2%. Tenant activity has picked up, with numerous tenants seeking space despite the uncertainty of flexible work arrangements. Many employers returned to work after Labor Day, and other major employers are waiting until the turn of the New Year. The Boston office market feels more “normal” again, with tenants touring, deals getting done, and strong venture capital funding driving growth.
The Cambridge and suburban office markets both posted positive net absorption in Q3, led by East Cambridge, 495 North, and 495 West. Over the past year, vacancies grew by one percentage point in the suburbs and by 1.6 percentage points in Cambridge. Rents in both markets continue to rise, by 2.3% in the suburbs and by 7.8% in Cambridge over the past year. Sublease space decreased this quarter and is now broadly in line with year-ago levels. Tenant activity is gaining momentum, though differing by submarket.