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Greater Boston has lagged other U.S. tech clusters in AI companies’ leasing in recent years, compounding the office market struggles.
Recent activity points to a recovery, with East Cambridge leading the way.
“Although a lot of the deals are under 50,000 square feet, we have seen an uptick in leasing overall in the innovation and tech sectors,” said Liz Berthelette, Newmark’s head of Northeast research and national life science research.
AI companies account for over 19 percent of tenant requirements in Cambridge, according to Newmark data.
Newmark is tracking 7.8 million square feet of office requirements in the Greater Boston market, including a 73 percent year-over-year increase in square-footage for companies looking for space in Cambridge.
The report follows recent leases in East Cambridge by AI software developer Blitzy and Claude chatbot parent Anthropic during the third quarter, in what could be a harbinger of new tech industry growth.
The 7.7 million square-foot East Cambridge submarket still has the region’s highest asking office rents, at $88.18 per square foot for class A buildings. Vacancies ended the third quarter at 28.1 percent in East Cambridge and 25 percent citywide.
West Cambridge also has benefited from growth of AI companies with a life science focus. In late 2026, Lila Life Science inked a 246,000 square-foot lease at Alewife Park.
Since Jan. 1, Cambridge has 128,242 square feet of positive absorption, including Sanofi’s early lease renewal for its 350 and 450 Water St. buildings at Cambridge Crossing totaling over 900,000 square feet.
Boston CBD, Suburbs Lagging
A report issued this summer by CBRE noted that Greater Boston has trailed other top tech markets in AI office leasing since 2019.
Greater Boston had less than 3.7 million square feet, compared with over 10 million square feet in both San Francisco and Silicon Valley, and 4 million square feet in Manhattan.
The 178 million square-foot Greater Boston’s office market has a 24 percent vacancy rate, according to Newmark data, with no new office construction across the area for the first time since 2005.
Year-to-date, the Greater Boston office market has 1.3 million square feet of negative absorption, with over 430,000 square feet of that figure concentrated in Boston’s central business district. The suburbs accounted for another 957,205 square feet of negative absorption.
Innovation sectors – including AI and robotics – are expected to drive future leasing demand, although some companies will be considering lab and R&D/flex properties instead of offices, the Newmark market snapshot predicts.
