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Boston Closed Summer As Nation's Hottest Office Market, CBRE Reports

Bisnow Archive/Andrew Martinez
Downtown Boston, Seen From The Seaport In Summer 2021.

Boston was the nation’s hottest office market at the end of the summer, scoring first among major metros in leasing activity and active tenants in the market, according to a new CBRE report.

Massive leases by Moderna and asset manager Wellington Management carried leasing metrics while sublease availability fell below the national average, according to CBRE’s Pulse of the U.S. Office Demand report. Boston led the nation’s office markets in September, which was the strongest month for office markets nationwide since the onset of the coronavirus pandemic.

“Boston showed incredible resilience with a monster month of leasing activity and a steady reduction of sublease space,” CBRE Senior Director of Research and Analysis Nicole LaRusso said in a statement.

Wellington Management in late September inked the second-largest lease of the year in Boston, a 524K SF, 10-year lease extension at the Atlantic Wharf tower along the Fort Point Channel in downtown. The 31-story tower's landlords are Boston Properties and Norges Bank Investment Management. In a lift from the life sciences market, Moderna, creator of one of the three Covid-19 vaccines, announced on the same day as Wellington Management that it signed for a new 462K SF headquarters at Alexandria Real Estate Equities’ rising Kendall Square project.

Sublease space in Boston, once at an all-time high during the pandemic, sat at 2.7M SF in Q3, a massive decline of 700K SF from the first quarter of this year, according to CBRE’s Boston Office Figures Q3 2021 report. Of that figure, almost 420K SF was leased while 330K SF was withdrawn from tenants moving to reoccupy their spaces.

The Boston market also led the nation in CBRE’s tenants-in-market index, a metric calculated by comparing active tenant demand to 2018-19 levels. Tenants with requirements greater than 20K SF are seeking a combined 3.7M SF in Boston, ahead of San Francisco, Dallas, Atlanta and Manhattan, according to CBRE.

Despite the green shoots, Boston is lagging behind the nation’s return to office metrics now at their highest rate since the pandemic began. Daily Boston office occupancy held steady between 15% and 18% in August, according to CBRE, still below the national average of 36% in early October according to new Kastle Systems research.

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