Boston is one of the country’s most vibrant, thriving cities. With a seemingly limitless pool of employee talent and significant job growth in a range of industries, the Boston office space market has become increasingly competitive, or tenants and landlords.
Employment grew by approximately 150,000 new jobs in 2018, with year-over-year employment growing at a rate higher than New York City, Los Angeles, San Francisco, and Washington, DC. Nearly 20 leases for 100,000 square foot office spaces were signed across the city and suburbs.
Business and professional services continues to be one of the largest industries in Boston, along with life sciences and technology. Unemployment is the lowest it’s been since the dot-com bubble.
Boston Office Space | Lease Data and Trends
Average asking rent varies depending on building class. Boston office space in Class A properties lease for around $40 per square foot, while Class B and Class C properties rent for closer to $30 per square foot.
Boston offers plenty of office rental options, with a total inventory of nearly 160 million square feet and an overall vacancy rate of 13.5%. More than 2 million square feet of assets are currently under construction, providing plenty of inventory for the still growing job market.
Boston Office Space for Lease | Average Asking Rents
Boston’s varied commercial real estate submarkets have something to offer in every price range. Overall asking rent can be as a low as $19 per square foot (495/ North) or as high as $83 per square foot (East Cambridge).
|Office space for lease||Class A||Class B|
Find Boston Office Space for Rent in Popular Neighborhoods
Some people call Boston the “city of neighborhoods” because of how different its subsections are. It features 23 individual neighborhoods. Here is a brief summary of some of the most popular neighborhoods to help you decide where might be best to look for office space.
Financial District (Downtown Boston)
Boston’s Financial District neighborhood rests in Downtown Boston near the Government Center. The area is bounded by Atlantic Avenue, State Street, and Devonshire Street. The Financial District is thus named because it includes so many mutual fund companies and banks. Working in this neighborhood means working alongside Fidelity Investments, Eastern Bank, The Debt Exchange, Goodwin Procter, and Sovereign Bank. Asking rents hover around $60 per square foot for Class A offices, and closer to $50 per square foot in Class B buildings.
Back Bay is known for its 19th-century urban designed homes and its impressive shopping options. Before the filling project that prepared it to be developed for residential and commercial properties, it was literally a bay. Across all building classes, Back Bay features nearly 13 square feet of office space at an average asking rent of $64 per square foot.
Cambridge, located just north of Boston, is home to both Harvard University and the Massachusetts Institute of Technology. It features Kendall Square, which has been described as “the most innovative square mile on the planet” because of its high number of entrepreneurial startups. The Cambridge Chronicle still serves the city and is the oldest weekly newspaper in the United States. Notable businesses in Cambridge include Biogen Idec, Genzyme, Cambridge Innovation Center, Akamai Technologies, and Novartis Institutes for BioMedical Research. Cambridge office space costs an average of $63.60/sqft.
Seaport Square, also called Boston Seaport, takes up 23 acres of land. By 2020, it is projected to be a master planned community. Upon completion, it is intended to include 2.6 million square feet of residences and 1.3 million square feet of office space. Seaport Square is conveniently located near Downtown Boston, the I-90 and I-93 interchange, Logan Airport, and the South Station of Amtrak. Seaport office spaces boast very reasonable prices—an average of $55.80/sqft. Because this up-and-coming neighborhood is already under construction, it’s no surprise more commercial spaces are under development, too: in fact, 892,000 more square feet of office space will be available for rent in the near future.
This is the area near South Station, which is Boston’s busiest transportation hub that is served by Amtrak, MBTA rapid transit, and MBTA commuter rail. Many of Boston’s transportation options drop off there so people can easily get to Downtown Boston. South Station has more than 2 million square feet of inventory with a 2.7% vacancy rate. Rent for commercial spaces is very reasonable at $49.96/sqft.
Charlestown is the oldest neighborhood in Boston. It rests on a peninsula that meets the Charles River, Mystic River, and Boston Harbor; much of its residential real estate is on the waterfront. This neighborhood also has easy access to Downtown Boston. The average asking rent for commercial real estate in Charlestown is $43.47/sqft with a direct vacancy of only 3.3%.
Dorchester is both the geographically largest and most populous neighborhood in Boston. Major companies and employers in this neighborhood include the Edward M Kennedy Institute for the United States Senate, the John F. Kennedy Presidential Library and Museum, and the Boston campus of the University of Massachusetts.
What Brokers Say About Boston Office Space for Lease
The city of Boston is the only U.S. state capital that features an ocean shoreline. Boston is renowned as one of the world’s top 30 most economically powerful cities. The region’s institutions of higher education contribute greatly to Boston’s economic status.
The area where Harvard, the Massachusetts Institute of Technology, and Tufts operate is actually known as the Brainpower Triangle. The schools not only attract brilliant young minds from around the world but also provide numerous employment opportunities. The area also houses a number of technology companies, and a global hub for biotechnology startups.
In addition, Boston is a huge center for financial services, particularly when it comes to mutual funds and insurance. In fact, the 2017 Global Financial Centres Index named Boston on the fourth-most competitive financial center in the United States.
Securing office space in Boston means being situated alongside companies such as Harvard Bioscience, Converse, Fidelity Investments, Friendly’s, Gillette, GE Measurement & Control Solutions, New Balance, and Liberty Mutual.
Boston culture features an interesting blend of colonial history and innovation. Although it’s a popular tourist destination, it’s also a fun and lucrative place to live. Residents can enjoy a variety of city features, such as visiting Boston Common, the country’s oldest public park; exploring one of its civic landmarks such as the Freedom Trail; or checking out one of its many shopping options, such as the Faneuil Hall Marketplace, the Prudential Center, or Wrentham Village.
Boston Office Space | Market Outlook
The pace of demand for office space in Boston does not appear to be slowing, with a significant need for new lab space to accommodate growth in the life sciences sector. With no lab vacancy in Cambridge or Kendall Square and strikingly low vacancy rates across the city, many more traditional office developers may adopt their space to fill the demand. However, this will further tighten the traditional office market, increasing competition in areas such as Seaport, Watertown, and Waltham.
The nearly 3 million square feet of new office space set to hit the market in 2019 will be met with open arms, but the influx of available space will likely do nothing to average market pricing, as demand is still outpacing supply.
Getting to, From, and Around Boston, MA
Almost one-third of Boston locals use public transportation to get to work, and the city ranks fifth for public transportation rate in the United States. More than one-third of those living in the city do not own a car. The majority of public transportation commuters use the Massachusetts Bay Transportation Authority (MBTA), which operates an underground transit system, buses, and water shuttles.
Boston has also earned the nickname “The Walking City” because about 13% of the population chooses to walk to work. Though the city doesn’t have the best year-round conditions for biking, it still boasts one of highest rates of bicycle commuting. The city’s main airport is Logan Airport, which is located in East Boston. Other airports include Beverly Municipal Airport, Hanscom Field, and Norwood Memorial Airport.
Boston is bordered by: Winthrop, Revere, Chelsea, Everett, Somerville, Cambridge, Watertown, Newton, Needham, and Quincy.