- Occupancies took another step forward in the fourth quarter.
- Leasing in new properties, especially build-to-suits, is propping up net absorption.
- Lab, cGMP manufacturing, flex, and warehouse are all replacing outdated office stock.
- Office construction remains limited, but new space is winning out.
The Hub’s office market has posted two consecutive quarters of fundamental improvements. In Boston, vacancies ended the year at 14.1%, 1.6 percentage points better than in midyear 2021. The vacancy recovery has also emerged in Cambridge and in the Suburbs. In fact, Cambridge’s 10.2% availability rate is in line with its long-term historical average while vacancies in the Suburbs (18.7%) shrank by 40 basis points in the fourth quarter.
Demand gains have been supported by leasing from companies across a range of industries, many benefitting from record levels of venture capital investment. Absorption has also been boosted by tenants occupying space in recently completed properties such as MassMutual’s new Seaport digs, the Hub on Causeway, and 455 Grand Union Boulevard in Assembly Row. Smooth sailing is unlikely, but the Boston Metro is positioned to continue its recovery into 2022.