Greater Boston Office Market


While the quarter was difficult, many real estate market indicators weren’t as severe as in the third quarter. Sublet additions rose by roughly 1.2 million square feet, compared to 1.6 million square feet in Q3. Absorption was roughly a million square feet negative, compared to 1.4 million square feet the quarter before. Landlords in most corners of the market held asking rents near pre-COVID levels. Though, our fourth quarter data did show some drops in asking rents, most notably in Class B properties downtown. Despite sporadic declines, these drops haven’t nearly been commensurate with the recent steep negative absorption and rising sublet availabilities. Institutional landlords have bet on holding out through this tough period. Landlords also demonstrated similar instincts in the capital markets as few have chosen to sell general office assets. These holding tendencies in both rents and the capital markets make sense when the market has been as uncertain as it has.


It is almost certain that these next few months will be another trying period for the country’s public health and economy. But we now have the first sign of a resolution to this crisis thanks to record and groundbreaking work by biotechnology companies. Pfizer and Cambridge-based Moderna have received emergency approval for an effective COVID-19 vaccine, and states have already begun inoculating their most vulnerable populations. Most companies have waited until the vaccine becomes widely available before making substantial real estate decisions. Broader public accessibility to the vaccine appears unlikely until at least the Spring. But upon that point, deal volume should return.