60 State St./Photo courtesy of Savills
Despite some recent high-profile corporate transactions, office leasing activity in Boston declined in 2025 and tenants leaned toward renewals.
Higher construction costs associated with buildouts of new offices are factoring into companies’ real estate decisions, said Michael Rabinovich, research associate for brokerage Savills.
“Renewals remain economically friendly to lots of occupiers,” Rabinovich said.
Overall leasing activity in Boston’s central business district during 2025 was 4.2 million square feet, down from 4.8 million square feet in 2024, according to a Savills report released this week.
After peaking at 24.4 percent at the end of 2024, the overall availability rate in Boston’s 75.2 million square-foot central business district declined 2.2 percent to 22.2 percent. Sublease listings dropped to under 3 million square feet, down 900,000 square feet from the previous year, reflecting both sublease transaction activity and expirations of underlying leases.
Tenants with large space requirements now have fewer options to relocate, with major office construction halting following last fall’s completion of Hines’ South Station Tower.
“Speculative new construction is effectively capped for the foreseeable future, and premiere space outside of those highly priced new construction towers is tight,” Rabinovich said.
Although South Station Tower has the largest available office block in the urban core at over 575,000 square feet, according to Cushman & Wakefield, JPMorgan Chase has been in negotiations to lease up to 250,000 square feet at the Atlantic Avenue development.
That would leave Leggat McCall Properties’ year-old 40 Thorndike St. project in Cambridge as the biggest notable office availability in Boston and Cambridge at 422,000 square feet.
Fidelity Investments also has offered its 803,000 square-foot headquarters at 245 Summer St. for lease as it prepares to reoccupy the Commonwealth Pier complex following a major redevelopment project.
Total tenant requirements have hovered in the 4 million square foot range in recent quarters, Rabinovich said.
Average asking rents rose slightly to $67.35 per square foot in the fourth quarter, up 0.8 percent year-over-year, Savills reported. But class A rents declined 0.2 percent to $71.43 per square foot.
