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Market Report

Boston Office Investment Forecast

2020 Outlook

Tech Firms Boost Demand in Core Boston Office Districts; Suburban Yields Draw Investors

New office leases in core locations elevating Boston’s position as a tech hub. Approximately 20 tech companies have announced plans to expand in the market this year, targeting the Financial District, Back Bay, Cambridge, and Seaport District. Recently penned leases include a 180,000-square-foot commitment in Cambridge from Google, and 160,000-square-foot deal by Klaviyo in the Financial District, both set to occupy the space in 2020. Additionally, tech company Philips will be relocating from the Essex suburb to Cambridge, where it will occupy 243,000 square feet. These companies entering and expanding in the core will support an increase in space demand this year. However, developers have responded to rising demand and will deliver the largest amount of new supply in over a decade, which will ultimately lift vacancy for the second consecutive year. Weakness may be pronounced in Dorchester, Roxbury and the Financial District, where pre-leasing is trending below the market average. Nonetheless, the influx of available space will not impact marketed rents for available space this year, which will outpace last year’s growth.

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