Here are the Priciest Office Submarkets

Boston’s Cambridge was the most expensive office submarket in 2021 by average sale price, according to an analysis of CommercialEdge data from PropertyShark, a subsidiary of Yardi. 

The average price per square foot paid in office sales in the life sciences hotspot topped $1,560, thanks mostly to four high-profile deals.  Those include the purchase of Charles Park by Alexandria Real Estate Equities in December and MetLife Real Estate Investment’s acquisition of One Memorial Drive in September; both deals exceeded a price of $2,000 per square foot. 

Pre-pandemic, the submarket pulled in the number four spot with an average price of $1,074 square foot in 2019.  Demand has ballooned since, and vacancies have been as low as 1.1%.

CBRE researchers predict life sciences will continue to thrill investors: investment in US life sciences real estate is poised to grow another 10% minimum this year, on top of a 62% uptick last year. And “Cambridge, in particular, was the epicenter of life sciences growth in Boston. Accordingly, property valuations subsequently increased,” writes PropertyShark’s Lucian Alixandrescu.

The rest of the top 10 most expensive office submarkets were split between other parts of Boston, as well as Los Angeles, New York City, the Bay Area and Chicago. Boston’s central business district rang in at number four, with an average sale price of $932 per square foot for assets in that submarket. The city’s Seaport Innovation District placed eighth.

Beverly Hills also outpaced Silicon Valley to become the country’s second priciest office submarket. Four marquee deals in Beverly Hills brought the submarket’s average price to $1,277 per square foot. It is the most expensive market in Los Angeles. 

The Bay Area markets of Mountain View – East, Cupertino, and Sunnyvale – West all rang in the top 10 as well, at sixth, seventh, and ninth places respectively. California also claimed 44 of the top 100 most expensive submarkets.

Manhattan’s Chelsea claimed the third spot, with an average sale price of $1,046 from four sales. The submarket was #9 in PropertyShark’s 2019 ranking. Manhattan’s Plaza District came in fifth. 

Chicago’s West Loop also hit the top 10 with three sales averaging out at $804 per square foot.

The nationwide average price per square foot of office space was $237 in 2021, an increase from $233 in 2019, according to PropertyShark. To determine the priciest office markets, PropertyShark examined office deals closed over the course of 2021 using data CommercialEdge provided as of February 10. Their review included individual property sales, as well as portfolio sales where the price for each asset was known. Portfolio deals were counted as a single transaction. Properties smaller than 25,000 square feet were excluded.