Research Overview

Lincoln Property Company’s in-house Research and Valuation departments translate real-time data on local market trends into strategic guidance for our clients.

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Boston’s office market ended the first quarter of 2021 on a slightly more positive note than previous quarters, though the uncertain conditions of 2020 persist. The metro added a seasonally adjusted 27,100 jobs over the trailing 3-months, still not enough to fully repair the employment damage from Spring 2020, but a significant improvement over the anemic job gains of Winter 2020. Direct net absorption was again highly negative, totaling 1.8 million square feet across the metro, one of the steeper declines in recent history. Minimal direct deal activity coupled with large numbers of leases rolling allowed these steep levels of negative absorption. In the face of little activity and lingering uncertainty over the return to the office, landlords had responded in varied ways with their asking rent levels. Many landlords have dropped rents, while others have kept them the same as pre-COVID. Some are offering steep concession packages, while others have held rents constant.


Greater Boston’s lab market continued its positive momentum from 2020 into the first quarter of 2021. Headlining the quarter was the nearly $4.5 billion in venture capital investment in Massachusetts life science companies, more than double the previous quarterly record. This astounding investment level helped create dozens of companies that need immediate and significantly more space than is currently on the market. As such, quarterly absorption was again strongly positive, sending overall vacancies to 3.3%, among the lowest lab vacancy rates Lincoln has tracked. Rents shot up across the board in response to these strong landlord conditions and tenant demands for higher TI allowances and turnkey lab buildouts. The market’s already large construction pipeline has swelled further as developers look for opportunities in emerging clusters like the Seaport, Somerville, Watertown, and Waltham. The first quarter also saw developers start to outline projects beyond these emerging clusters and bet pioneering locations like Weston, Newton, Burlington, and the Back Bay. The tens of millions of square feet proposed recently might seem frightening, but investors shouldn’t ring alarm bells just yet. New construction has historically leased well and is still largely confined to emerging clusters where demand is strongest. Further, most of this supply is due years from now, and not all the projects proposed will get built.


The first quarter of 2021 was another strong period for the industrial property type. E-commerce sales maintained their post- COVID-19 momentum and finished near record-high levels. Surging levels of online sales kept demand for warehouse and distribution space strong from e-commerce users. Unlike other property types, employee occupancy in industrial buildings has generally remained high throughout the pandemic. Many industrial employees are essential workers, and social distancing is easier to practice with industrial’s higher square footage per employee. Unlike 2020, 2021 has brought tenants out to tour and lease in the market beyond Amazon. Amazon took up an inordinate amount of the demand in 2020 but now many of the largest leases are from other industrial users. The return of a diversity of leasing bodes well for the market going forward.