Demand for Boston Metro office space is showing no signs of slowing down, according to a recent article in BisNow. Commercial real estate analysts say that Boston posted an 11.9% office vacancy rate during the third quarter of 2016. This is 90 basis points lower than the same quarter last year. At the same time, average effective office rent is up 3% year-over-year.
Boston is among a handful of top-performing major commercial markets, being tied with Portland, OR, as having the fifth-lowest office vacancy rates. Other major metros with low vacancy rates include New York, Washington D.C., San Francisco and Seattle. Each of these metros had vacancy rates ranging from 9.2% to 10.8% during the third quarter of 2016. Nationally, office vacancies averaged 16% during this period.
The strength of Boston Metro commercial real estate can be attributed to the diversity of industry that thrives in our market. Technology and healthcare continue to lead the pack, with Partners Healthcare moving into a new 850,000 square-foot facility in Somerville. We are also seeing growth in consumer products, textile production and other manufacturing areas.
Another trend taking place involves business consolidations, with more companies looking to centralize their employees in high-quality single locations. For example, J.C. Cannistraro, the area’s largest mechanical construction firm, announced that they will relocate their manufacturing and warehousing operations from Wilmington, Watertown and Stoughton, to a 157,000 square-foot building in Boston’s Seaport District. The move is expected to be completed by September 2017.
Meanwhile, growth in the Boston Metro’s suburban office market has been driven by build-to-suit construction. Absorption topped 1.5 million square feet during the third quarter of 2016, as major tenants took occupancy of newly-completed headquarters.
The diversity of the Boston Metro economy positions our commercial real estate market for future growth! If you are ready to begin, relocate or expand your business, team up with an experienced commercial real estate broker at Jay Nuss Realty Group, LLC! Whether you are thinking of buying or leasing Boston Metro commercial real estate, we can help you find the ideal property. Contact us today for expert guidance!
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