Boston Tops the List of Expanding Office Markets

Boston is the leading office market in the country. New research from CBRE shows that Boston has strong Tenants-in-the-Market Index and leasing activity ranks, and the city is currently exceeding its pre-COVD activity in September. At the same time, the market has a shirking availability of sublease space, three trends that are spelling good news for the office recovery.

CBRE measures the health of an office market based on the three metrics above, the TIM Index, leasing demand and sublease availability, using 100 as a baseline for pre-COVID activity to give context to the recovery in these markets. On the TIM Index, Boston scored 125, 42 points above the national average, and in leasing activity is surged to a score of 210, while the average US city scored a 93. Sublease availability fell 18 points to a score of 145. While that is still 48% above pre-COVID activity, the significant decrease is a sign of recovery.

The life science industry is driving a lot of the new office demand. Boston is one of the three major life science hubs in the country, and it will likely continue to fuel office activity for the next several years. “Boston’s thriving life science industry is the anchor in the city’s recovery,” Nicole LaRusso, senior director of research and analysis at CBRE, said in a statement about the research. “As the summer’s COVID surge fades into the distance, and vaccination rates continue to climb, we are cautiously optimistic that the improvement in office demand will build through the end of 2021 and into 2022.”

The city has been making headlines all year for its strong strides in the recovery. In the same CBRE report in August, the city was also ranked among the top markets, alongside Texas and Florida. The report described all three as setting the pace of the recovery. Boston was again the U.S. leader in pandemic-era office market performance, again driven by the life science industry.

As a result, Boston has outpaced Manhattan as the most liquid CRE market in the US, with investment activity and the city’s share of institutional investor volume remaining stable throughout the pandemic. Data from Real Capital Analytics shows that Boston’s component of unique, active buyers has declined only slightly over the past four quarters, while Manhattan’s has steadily fallen since the end of 2019.