Boston Office Report – Spring 2019

The metro’s office market is posting steady gains on the strength of core industries like education and health care, technology and professional services.
Office-using employment in Boston, click to enlarge
Office-using employment in Boston, click to enlarge

Boston’s strong market dynamics, educated workforce and deep talent pool are the main contributing factors driving growth—amid the metro’s thriving tech and life sciences scene and expanding coworking segment. The Massachusetts Institute of Technology continues to outline Boston’s innovation identity with findings in robotics, AI and engineering, while venture funds and government-backed programs fuel the ongoing progress. The metro added 6,500 office-using jobs in the 12 months ending in March, with much of the gains coming from the professional and business services sector (5,700 jobs, up 1.0 percent year-over-year). Office-using employment growth was supported by expanding Am Law 200 firms such as Deloitte and Ernst & Young.

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Employment growth by sector in Boston, click to enlarge
Employment growth by sector in Boston, click to enlarge

Boston is a technology and health-care hub, attracting major economic powerhouses and blue-chip companies. Apple, Siemens Healthineers and Wayfair are expanding their employee base, leasing up all the large office availabilities in the metro. Philips Healthcare and Sanofi have chosen to plant their flags in Cambridge, the East Coast’s biotech epicenter. Google leased the entire office component of the upcoming 325 Main St. in Kendall Square, while Takeda Pharmaceutical Co. is relocating its operations from Chicago. The metro’s overall vacancy rate was 9.7 percent at the end of April.

Despite the 7.8 million-square-foot development pipeline, demand far outpaces supply and most projects under construction are preleased.

Read the full Yardi Matrix report.