Office space demand in the Boston Metro is alive and well, especially for newer Class-A buildings. The latest report from Boston Bisnow states that Class-A developers are attracting new tenants at an improved pace from a year ago, with major tenant agreements lined up for 2023. Over four million square feet of space has been leased or pre-leased during the past several months.
Yet the market is not where it was prior to the pandemic. According to the Boston Globe, about 30% of employees are currently working from home. Cambridge has about 40% of employees working from home. Despite the call of “back to the office” being issued by certain employers, some percentage of the workforce will likely remain remote.
Boston is well-positioned to weather this shift in office occupancy, thanks to ongoing demand for lab space and a diverse economy. But not all buildings are suitable for conversion to other uses, and not all buildings are cost-effective to renovate. Meanwhile, demand for older Class-A office space is declining as corporate tenants sign up for prestigious new developments.
Simply put, companies are seeking the best locations, infrastructure, amenities and communal spaces for their workforce. This may be necessary to attract and retain talent, and to prepare for new technologies and future growth.
To be competitive amid evolving demand, property managers must present a clear value proposition, and be willing to make practical upgrades to meet the needs of tenants. Office buildings with desirable locations and popular local amenities will have evergreen demand, so long as functional obsolescence can be avoided. Pricing a lease appropriate for the building, and offering flexible terms, can attract new tenants and help retain existing tenants.
When you are ready to begin, relocate or expand your business, team up with the Jay Nuss Realty Group, LLC! Whether you are thinking of buying, leasing, or investing in Boston Metro commercial real estate, we can help you find the ideal property!
Contact us today for expert guidance!