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Nearly half of the respondents to an industry survey said they will reduce their Massachusetts real estate footprint in the next two years, adding pressure on the local commercial real estate market already hit with double-digit vacancies and record sublease listings.

The 47 percent of employers indicating space cutbacks in a Massachusetts Business Roundtable survey represent an increase from 36 percent a year ago.

Not a single respondent indicated their company plans to leave Massachusetts, and the survey showed broad confidence in the region’s competitiveness and talent pool.

At the same time, companies said difficulties finding job candidates locally are prompting them to look for remote workers out-of-state. And the region’s high housing costs are making it difficult to recruit out-of-state candidates willing to move to Massachusetts.

“In Massachusetts, I can give [multiple] examples of roles in Boston where we’ve tried to get folks to move here from Atlanta, Minneapolis, Chicago,” the report quotes one executive as responding. “When they do the math, they can’t seem to make it work even with increases we give them to move here (between housing, taxes, etc.)”

Another respondent said Boston’s positive reputation can’t offset its high cost of living, commenting: “The city itself is a huge attraction – people love Boston! People think highly of the place but can’t imagine living here due to not being able to make the financials work.”

Companies are having the hardest time finding managerial roles and above, with 81 percent saying such positions are difficult to fill.

Confidence in the region’s talent pool, with its high percentage of STEM graduates, has risen since 2022. More than two-thirds of respondents cited it as a key factor in their Bay State presence.

The findings raise another red flag for the region’s commercial real estate market.

Greater Boston’s office market has divided into two distinct tiers, with class A properties continuing to attract tenants while class B properties struggle with vacancies topping 20 percent in some neighborhoods. Nearly 10 million square feet of sublease space is listed in the downtown and suburban markets, according to JLL data presented at a NAIOP Massachusetts forum this week.

A stabilizing force in the suburban market has been the conversion of outdated office buildings into life science labs and other R&D uses, shrinking the office inventory by nearly 5 percent, said Sam Crossen, an executive vice president for JLL in Boston.

Downtown Boston vacancies are the focus of a consulting study commissioned by the Boston Planning & Development Agency due to be completed this summer, which is analyzing the financial feasibility of residential conversions. Mayor Michelle Wu said this month the administration is willing to consider financial subsidies for troubled properties.

Mass. Companies Plan More Real Estate Cutbacks

by Steve Adams time to read: 2 min