The Boston Commercial Real Estate Market

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Boston, Massachusetts, represents a bustling New England market with viable commercial real estate opportunities in the Northeast corridor. A technology and science research hotbed, the city ranks among the top in the US for entrepreneurial growth and innovation. Interested investors and prospective tenants – local and nationwide – utilize Crexi to find the ideal Boston commercial property for their needs.

Brokers in Boston and representing Boston assets harness Crexi’s listing capabilities to quickly market and manage properties from list to close. Using Crexi, brokers instantly connect with cohorts of viable buyers and tenants who’ve already indicated an interest in Boston’s marketplace.

As of this writing, Crexi has helped brokers and buyers navigate more than $440 billion in commercial property transactions and marketed assets representing more than $5 trillion in value. Crexi is proud to serve Boston, Waltham, Newton, Quincy, Somerville, and the surrounding areas as the fastest-growing online commercial real estate marketplace.

harborside view of Boston, Massachusetts with skyline in the background

The State of Commercial Real Estate in Boston

Boston is a historic city in the northeastern region of the United States, known for its rich culture and academic excellence. As one of the oldest cities in America, Boston has a unique blend of old-world charm and modern amenities, making it an attractive destination for businesses and investors.

The Greater Boston area is home to some of the world’s most prestigious universities, including Harvard University and Massachusetts Institute of Technology (MIT), which have contributed to the region’s reputation as a hub for innovation and technology. In addition, Boston has a diverse economy that includes industries such as finance, healthcare, biotechnology, and education.

All these factors combined make Boston an ideal location for commercial real estate investment or leasing opportunities. The thriving economy means plenty of potential tenants are looking for suitable spaces to rent. Meanwhile, investors can capitalize on stable market conditions with long-term growth potential. 

skyline view of Boston, Massachusetts

Boston Regional Breakdown

The population of Suffolk County (where Boston is located) increased by over 10.5% from 2010 to 2020, about half again as fast as Massachusetts, according to the most recent census. Boston is the capital and the largest city in the state, the financial center of New England, and home to centers of scientific research, including MIT and Harvard:

  • Nearly 656,000 reside in the City of Boston, and over 4.9 million in the Boston-Cambridge-Newton metropolitan area.
  • The population grew by 0.5% yearly, according to Data USA.
  • Greater Boston is home to principal cities, including Worcester, Providence, Lowell, Cambridge, Quincy, and Manchester.
  • Per capita income is $54,437, and median household income is $100,750, both figures about 10% higher than the amount in Massachusetts and 1.4 times higher than in the US.
  • The median age in the metro area is 39.2 years, with 40% of the population between the ages of 20 and 49.

The Boston Job Market

According to US News, the Boston job market is healthier than similar-sized metro areas, earning a ranking of 7.2 out of 10. Employers like Boston University, Harvard, Northeastern University, and Massachusetts General are among the region’s largest employers: 

  • Fastest-growing employment sectors include information, professional and business services, education and health services, and leisure and hospitality.
  • The unemployment rate in Boston is 2.9% (BLS December 2022), with more than 2.7 million working in the metropolitan area.
  • GDP in the Boston MSA is $531.6 billion, soaring by 56% between 2011 and 2021, according to the St. Louis Fed.
  • 10 Massachusetts businesses made the Glassdoor list of the best companies to work for, including Bain & Company, MathWorks, Boston Consulting Group, HubSpot, and Fidelity Investments.
  • Fidelity recently announced plans to add 500 new jobs in Boston, with roles ranging from IT to customer service to sales.
  • Top 5 employers in Suffolk County are Brigham & Women’s Hospital, Dan Farber Cancer Institute, Massachusetts General Hospital, Beth Israel Deaconess Medical Center, and Boston Children’s Hospital.
  • WalletHub ranks Boston as the 3rd best city for STEM jobs based on key factors such as professional opportunities, STEM-friendliness, and quality of life.
  • According to TechCrunch, the Boston metro area was the fourth most active venture capital market in the US due in part to the region’s history in deep tech, biotech, and cybersecurity.
  • Over 51% of residents hold a bachelor’s degree or higher, about 1.5 times the rate in the US.
  • Highly ranked universities in the region include Harvard, MIT, and Tufts.
  • Transportation infrastructure includes multiple Interstate and State highways, the Port of Boston, passenger and freight rail service, and Logan International Airport.
skyline view of Boston, Massachusetts with the harbor and Fenway Park visibile

Boston Industrial Market

The Greater Boston industrial market closed out in 2022 with solid fundamentals despite macroeconomic challenges. Leasing activity ended the year with 1.7 million square feet of positive net absorption, and rents saw a 12.3% increase. Several properties were delivered in Q4, causing overall vacancies to stabilize above 3.0%. Demand for higher quality assets continues to exceed supply, providing long-term stability in the market, according to Newmark’s 4Q22 Boston Industrial Market Report:

  • Total industrial inventory: 218,300,000 SF
  • Average asking rent: $14.89/SF per year NNN, marking a historical high and an increase of 18.6% year over year.
  • Vacancy rate: 3.5%
  • Absorption: 1.7 million SF (2022)
  • Key leases by tenant: BlueTriton Brands 275,000 SF, Ferguson 261,041 SF, Peak Event Services 232,000 SF, Globe Composite Solutions 151,101 SF
  • New construction: 5.9 million SF
  • Key sales by property: 200 Shuman Avenue in Stoughton ($42 million/$276 per SF), 180 Charles Street in Malden ($24.5 million/$380/SF), 10 Campanelli Circle in Canton ($16 million/$147/SF) 
  • Largest industrial submarkets: South, North, West, Urban

Discover Boston industrial space for rent.

A street in downtown Boston

Boston Office Market

The Boston Metro office vacancy rate rose to a cyclical high of 17% at the end of 2022 due to reduced space needs resulting from weakened macroeconomic conditions. Despite this, some companies are actively expanding their footprints in ground-up construction or other high-quality assets, and job growth remained positive across various office-using sectors. 

Additionally, venture capital flows for Massachusetts companies was $14.5 billion in (non-biotech) ventures/pre-IPO funding, the second highest on record. Here are the most recent trends in the Boston office market from Colliers:

  • Total office inventory: 186,299,441 SF
  • Average asking rents: $40.46/SF per year, full-service gross
  • Vacancy rate: 17.2%
  • Absorption: -2,499,524 SF in 2022
  • Key leases by tenant (Newmark Q4 2022): Workhuman 157,133 SF, Medtronic 112,952 SF, Indigo Ag 64,846 SF, SmartBear Software 52,000 SF
  • New construction: 1,750,810 SF delivered in 2022, with 3,576,152 SF currently under construction
  • Key sales by property (Newmark): 4 Burlington Woods $103 million ($944/SF), 20 Maguire Road $89 million ($878/SF), One Brattle Square $81 million ($834/SF)
  • Largest office submarkets: Boston CBD, Route 128 Mass Pike, Route 495 West, Route 128 Northwest 

Discover Boston office space for lease. 

skyline view of Boston, Massachusetts

Boston Retail Market

Retail in Greater Boston commercial real estate continues to rebound, according to Lee & Associates, with vacancy rates below 3%. Although average leasing rates have not reached pre-pandemic levels, sales transactions are on a record-breaking trajectory, reaching $3.3 billion over the past 12 months. Dicks Sporting Goods recently signed a lease for about 120,000 SF of the former Lord & Taylor space at the Prudential Center.

  • Total retail inventory: 246,222,850 SF
  • Average asking rent: $26.30/SF per year, NNN
  • Rent growth: 6.2% year over year
  • Vacancy rate: 2.7%
  • Absorption: 851,550 SF in Q3 2022
  • Key leases by tenant: Dick’s Sporting Goods 117,000 SF, Ashley Furniture 65,427 SF, Amazon Fresh 48,725 SF
  • New construction: 1.1 million SF under construction
  • Key sales by property: 100 Cambridgeside Place Unit 100 $135 million ($201/SF), 90 Pleasant Valley Street $47.3 million ($186/SF), 160 Summer Street $25.1 million ($259/SF)
  • Investment sales trends (NAR Commercial): Avg transaction sale price $228/SF, market cap rate 6.1%
  • Largest retail submarkets (ABG Commercial Realty): Rockingham, Route 3 South, Lawrence/Andover, Route 24

Discover Boston retail space for rent.

Boston Multifamily Market

Boston apartment market vacancies remain healthy, ending 2022 at 5.3%. This is better than the 10-year average but still 90 basis points below year-ago levels. New construction has outpaced demand, resulting in less rent growth than in 2021 and early 2022. Mortgage rates are rising, creating a barrier to entry and increasing occupancies. However, job market stalling could negatively impact leasing prospects in 2023. These are the most recent apartment trends according to Collier’s 22Q4 Boston Multifamily Market Report:

  • Total housing units: 2,048,672
  • Renter occupied: 38%
  • Multifamily inventory: 778,495 units
  • Average asking rent: $2.91/SF 
  • Rent growth: 5.0% year over year
  • Vacancy rate: 5.3%
  • Net absorption: 4,000 in 2022 with demand growth of 2% year over year
  • Units under construction: 17,222
  • Key sales by property: Matrix Hudson $55.5 million ($315,000/unit), Albemarle Gardens $29.5 million ($242,000/unit), Greenhill Park Apartments $17.2 million ($187,500/unit)
  • Market cap rate: 4.1% (NAR Commercial)

Discover Boston multifamily apartments for sale.

Get more in-depth Boston market data with Crexi Intelligence.

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Shanti Ryle
Shanti Ryle

Content Marketing Manager

Shanti leads Crexi's content marketing strategies with 7+ years of content development experience, creating everything from blog posts to award-winning podcasts. Previously, she worked on content teams at Snapchat, Weedmaps, and HopSkipDrive as well as developed copy, articles, and media for freelance publications.

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