Boston Commercial Real Estate Dashboard

Office Vacancy (Q4 2025)

18.2%

C&W — up from 7.5% pre-COVID

First Positive Absorption

Since 2021

H2 2025 — strongest since COVID

CMBS Office Delinquency

11.0%

National — historic high (end 2024)

Sale Discounts

31–62%

Major 2025 property sales vs. prior value

Commercial Real Estate Overview

Boston's office market has more than doubled its vacancy rate since 2019 — but early signs of stabilization emerged in H2 2025

⚠️ Vacancy Has More Than Doubled

7.5% (2019) → 18.2% (Q4 2025) — a 143% increase

Cushman & Wakefield Q4 2025 Boston MarketBeat

📈 First Positive Absorption Since 2021

H2 2025 saw +2.5M SF net absorption — strongest back-to-back quarters since COVID

Newmark Q4 2025 — vacancy ticked up only 10 bps QoQ, signaling stabilization

Office Vacancy Trajectory

Boston overall vacancy, 2019–Q4 2025

Vacancy by Source

Different brokerages, different methodologies — same trend

📊

Early stabilization signals: Q4 2025 vacancy rose only 10 bps QoQ (C&W). Class A vacancy actually declined 5 bps. New construction at 20-year low (750K SF, all build-to-suit). Downtown Boston has seen 6 consecutive quarters of declining vacancy. But recovery to pre-pandemic levels could take a decade+ at current absorption rates.

Vacancy Deep Dive

Class A vs B divide, life sciences trends, and the flight to quality

Class A Vacancy

~16%

Pre-COVID

Trend

Declining 5bps QoQ

Class B Vacancy

~22%

Pre-COVID

8.3%

Rents

Off 15%+ from peak

Life Sciences

Improving

Q4 Absorption

Positive

Sublease Down

-100bps YoY

Class A vs. Class B Vacancy

The flight-to-quality gap is widening

National Comparison

Boston vs. national and peer cities

📊

Construction pipeline at 20-year low: Only 750K SF under construction in Greater Boston, all build-to-suit. No major speculative office projects. This supply constraint should help vacancy stabilize over 2026-2027.

🔴

Life sciences showing improvement: Positive net absorption in Q4 2025, sublease availability down 100 bps YoY (lowest since Q2 2023). However, biotech layoffs continue and the labor market remains sluggish.

Downtown Boston Recovery

6 consecutive quarters of declining vacancy — recovering faster than Back Bay

📈 Downtown Turnaround

6 consecutive quarters of declining vacancy — peak 28.5% → 25.2% year-end 2025

Downtown Boston Alliance / Newmark — recovery rate 2× faster than Back Bay

Downtown Peak Vacancy

28.5%

Pandemic Peak

Mid-2024

Year-End 2025

25.2%

Improvement

-3.3 percentage points

Subway Ridership Q4

4.4M

Trend

Rising each quarter

Downtown Vacancy — 6 Quarter Decline

From 28.5% peak to 25.2% — recovery accelerating

Key Recovery Metrics

Downtown Boston revitalization indicators

Retail Vacancy

Down 50%

From Peak

Street-level filling up

Recovery vs Back Bay

2× Faster

Absorption Rate

Downtown outperforming

Industrial Vacancy

9.6%

Leasing Volume

+36% vs 2024

💡

What's driving downtown recovery: Large-block leasing activity is strong (top 6 transactions each exceeded 115K SF). Direct leases are gaining share over sublease in the CBD. Subway ridership hit 4.4M rides in Q4 2025, rising each quarter. Retail vacancy has dropped 50% from peak.

CMBS & Financial Distress

Office CMBS delinquency hit 11% — a historic high — with $950B in loans maturing in 2025

⚠️ CMBS Office Delinquency at Historic High

11.01% — end of 2024 (up from 1.6% pre-COVID)

Overall CRE CMBS delinquency: 6.57%, up from 4.51% end of 2023

CMBS Delinquency Trend

Office sector — spiraling since 2022

CRE Loan Maturities

$2.3 trillion maturing through 2028

Bank CRE Lending

-58%

vs Pre-Pandemic

Office: -65%

National Office Vacancy

20.5%

Q4 2025

+30bps YoY (smallest increase in 5.5 yrs)

Loans Maturing (2025)

$950B

Refinancing

At higher rates

Major Boston Property Sales

Distressed sales revealing the true extent of value destruction

Sale Discounts from Prior Value

Major Boston office transactions, 2024–2025

Boston vs. National Sale Trends

Average office sale price per sq ft

Property	Sale Price	Prior Value	Discount
One Lincoln Street	$440M	$640M	-31%
100 Federal Street	$230M	$415M	-45%
One Post Office Square	$200M	$395M	-49%
One Boston Place	$112M	$293M	-62%

🔴

One Boston Place lost 62% of its value — selling for $112M after being valued at $293M. These aren't outliers. The national average decline for office properties is approximately 37% from peak values.

Property Tax Revenue Impact

Boston depends on property tax for ~73% of its revenue — commercial values are collapsing

⚠️ Boston's Fiscal Vulnerability

~73% of city revenue comes from property taxes

As commercial property values decline, the tax burden shifts to residential owners

City Revenue Composition

Boston's dependence on property tax

Commercial Assessment Impact

Before and after revaluation examples

Overassessment Claims

$545M

Buildings Affected

39 properties

Allegation

Retaliatory overvaluation

Tax Shift Risk

→ Residential

If Commercial Drops

Homeowners pay more

Recovery Timeline

10+ years

At Current Pace

To pre-pandemic levels