OFFICE MARKET OVERVIEW

ERIC SOLEM, Managing Principal | President

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Q1 2023 was a bummer for Boston’s office market. COVID and layoffs teamed up to deliver a one-two punch that knocked the vacancy rate up to 10.5%. Nobody was renting and the rental rates were dropping faster than the temperature is rising. The downtown market got the worst of it, with a whopping 12% vacancy rate, while the suburbs weren’t far behind with 9.5%. And even the fancy-schmancy Winthrop Center couldn’t catch a break, with 70% of their office space still up for grabs. Plus, with interest rates going up, nobody was buying anything. Even mixed-use developments were taking it on the chin. This market is down in the dumps and there’s no way to sugarcoat it.