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Office vacancies in Boston dropped for the fourth consecutive quarter, but the pace of leasing activity declined amid economic uncertainties.
The vacancy rate declined to 21.2 percent in the second quarter, JLL reported. Over the past 12 months, the city’s office market has nearly 132,000 square feet of positive absorption, according to JLL, the highest 12-month absorption figure since 2019.
But in a separate report, Savills Research & Data Services noted that the pace of large lease renewals slowed in the second quarter to just 700,000 square feet.
“Expiration-driven activity has slowed amid limited net net demand and macroeconomic uncertainty,” Savills’ report states.
The office market in Boston is increasingly divided into haves and have-nots, with class A properties continuing to attract leasing activity and slightly higher rents. On a quarter-to-quarter basis, average class A asking rents rose from $51.58 to $51.85 per square foot, JLL reported.
Tenants continue to gravitate toward upper-tier properties. Law firm ArentFox Schiff renewed and expanded to 39,200 square feet in the Prudential Tower, following the 2025 decision of Ropes & Gray to renew its lease in the Back Bay landmark. CIBC Private Health renewed a 57,000 square-foot lease at 100 Federal St. in the Financial District.
Sublease listings hit a post-pandemic low of 3.7 million square foot, compared with 4.1 million square feet one year ago, Savills reported.
The absorption gains include the commencement of a 75,000 square-foot lease for seven state agencies at 40 Broad St.
The state’s real estate agency, the Division of Capital Asset Management and Maintenance, last fall reconfigured office space for the Executive Office of Health and Human Services, MassAbility, Department of Youth Services, Massachusetts Commission for the Deaf and Hard of Hearing, Department of Developmental Services, Department of Mental Health, and the Massachusetts Commission for the Blind. The agencies relocated from 600 Washington St. in Downtown Crossing and 1000 Washington St. in South End.
The overall central business district has a 23.5 percent availability rate, according to Savills. The lowest vacancy rates are the Seaport District’s 17.8 percent and Back Bay’s 19.7 percent, while the Financial District’s vacancy rate was 27.3 percent at the end of the quarter.
