Boston’s suburban office market showed signs of stabilizing in late 2022 as leasing activity was driven by tenants upgrading to higher-quality buildings.
While downtown office space has been hit hard by subleasing activity and downsizing of corporate real estate during the hybrid and remote work era, the suburban market showed resiliency as the 2022 came to a close, CBRE reported.
The 105 million-square-foot suburban market had under 40,000 square feet of negative absorption during the fourth quarter. The suburbs had over 209,000 square feet of positive absorption for the year.
“The Q4 results show leasing activity remaining stable as economic uncertainty is a driving factor for both tenants and landlords going into 2023,” CBRE’s New England research team wrote in the report.
As in downtown Boston and Cambridge, tenants are taking advantage of the uptick in availabilities to upgrade to higher-quality buildings. Nearly two-thirds of all deals inked in the fourth quarter were for class A properties, CBRE reported.
In the largest suburban transaction of the quarter, WorkHuman signed a full building lease for 157,133 square feet at 100 Staples Drive in Framingham. The human resources specialist, previously known as Globoforce, opened a new 55,000-square-foot U.S. headquarters 200 Crossing Boulevard in Framingham in 2017. A spokesperson did not return a message seeking comment.
The suburban availability rate was 20.4 percent at the end of the quarter, including a 15.8 percent vacancy rate.
A key to the market’s stabilization was active leasing activity, totaling nearly 728,000 square feet in the fourth quarter. Average asking rents ended 2022 at $27.94 per square foot on a gross basis, including a high of $41.67 per square foot in the Route 128 west submarket.