An architectural rendering from October 2025 shows JPMorgan Chase's proposed crown sign for the South Station Tower. Image courtesy of JPMorgan Chase
A pair of new trophy buildings are leaving their marks on the Cambridge and Boston office markets, amid rising competition among class A building landlords to secure tenants.
Boston’s vacancy rate declined to 18.7 percent in the first quarter, CBRE reported, compared with 18.9 percent at the end of 2025. JPMorgan Chase’s 246,000 square-foot lease at Hines’ new South Station Tower exemplified the advantages that new marquee building owners enjoy in the current market conditions.
“When you think about market activity, the numbers are fairly good, but it’s really concentrated in a subset at the top of the market,” CBRE Vice Chairman Tim Lahey said. “Much of the focus and momentum has been on top-tier new construction or very highly amenitized towers.”
If 10-year absorption trends continue, the vacancy rate will drop below 3 percent for the city’s 23 trophy-level buildings, CBRE estimates. No major office groundbreakings are scheduled following the completion of the South Station Tower and The Druker Co.’s 350 Boylston St. office development which is preleased to Bain & Co.
The Class B/C market continues to struggle with elevated availability, ranging from 21.6 percent in the Seaport to 32.6 percent in Back Bay.
Overall, the city’s office market had nearly 89,000 square feet of negative absorption in the first quarter, a smaller decline than the nearly 330,000 square feet in the first quarter of 2025.
In a departure from historical trends, vacancies on upper floors of office towers in Boston now are 13 percent, compared with 7.3 percent on the 19th or lower floors, Avison Young reported.
Average lease term hit its longest term since mid-2019 at 81 months.
Cambridge Vacancy Rate Unchanged
Takeda Pharmaceuticals’ new office-lab tower in Kendall Square is sending ripples through the Cambridge office and lab market as it nears completion this fall.
Takeda listed nearly 650,000 square feet for sublease in February at 35 and 40 Landsdowne St., 300 Massachusetts Ave. and 75-125 Binney St. as it prepares to consolidate its operations at the new 585 Kendall Global Research & Development Center developed by BioMed Realty.
Cambridge’s office vacancy rate was 21.7 percent in the first quarter, CBRE reported, unchanged from the year-end figure. The availability rate, including sublease listings, rose slightly to 24.7 percent.
East Cambridge’s vacancy rate increased 0.1 percent from the previous quarter to 22.5 percent.
The 101 million square-foot suburban Boston office market had 265,691 square feet of positive absorption in the first quarter, leaving the vacancy rate at 21.6 percent. Tenants are in the market for just 1.87 million square feet of office space, according to CBRE data.
Asking rents declined from the previous quarter from $29.75 to $28.80 per square foot, indicating increasing competition among landlords.
