The Current Greater Boston Office Market and How to Prepare for 2024
All eyes are on the office market, where an increasing number of vacancies are emerging as many companies opt to reduce their office space when leases expire. Over the three years since the pandemic began in 2020, businesses are still working on establishing their hybrid work models. Although each company tailors its approach based on its needs, work methods, and culture, a significant portion of them now provide at least one day of remote work per week.
Where do we stand now in the Greater Boston office market?
In the Greater Boston office market, vacancy rates are on the rise, with Class A trophy buildings being the least affected due to the flight to quality trend. Office rents are declining across the board due to decreased activity and the availability of subleases at discounted rates. Some tenants are seizing the opportunity to move to better-quality spaces at the same or lower rate. However, not all landlords can offer discounts due to high construction costs, building financing, etc. So, while terms are more favorable for tenants, do not expect flash sale price.
Currently, around 18 percent, or 50 million square feet, of office space is vacant in Greater Boston, and rents have dropped approximately $2-$5 per square foot compared to a year ago.
As a tenant in today’s market, the situation is in your favor. Should you have an upcoming lease in the next 15 months, it is critical to re-evaluate your office space strategy due to the impact of hybrid work, shifting market conditions, and your future growth expectations.In preparation for your next lease renewal, you should discuss with your broker the following: