Evaluating Retail Demand In Greater Boston; It’s All About The Corridors
January 23, 2025 — By Mike Hoban
Boston — So, what is the current state of retail in Greater Boston? Ann Ehrhart, founder, and CEO of retail consulting firm Everstreet, was recently asked that question by a client who had received dramatically different assessments from two retail brokers in the Boston market. While one decried a lack of quality retail space, the other declared the market “slow” and “dead.”
Asked which assessment was accurate, Ehrhart replied, “It’s actually both. Depending on where you own or operate retail, you could have wildly different results and metrics.”
Ehrhart provided an in-depth assessment of the evolving urban mixed-use retail landscape during her presentation, “Retail Outlook 2025: Key Insights For Navigating A Dynamic Market,” at the ULI Boston member luncheon, held at the Brown Rudnick Boston office at One Financial Center.
Due to limited access to sales and leasing comparables and other crucial data, retail has long been considered “an opaque asset class” for many industry professionals. “It’s not always clear what tenant goes with what space, goes with what location, and historically, there’s always been a one-size-fits-all solution that often produces less-than-optimal results,” Ehrhart explained.
Evaluating Demand
Ehrhart asserts that the key to achieving retail success is effectively syncing merchandising, design, and underwriting with location. “Whenever I encounter underperforming retail space, 99.999% of the time, it’s because one of those metrics is out of sync,” she told the audience. The first component of that equation is understanding the context of the asset’s location by gauging market demand. Ehrhart asks two primary questions to measure market demand: Are consumers coming to the location for goods and services? And are retail tenants actively looking for space in your locations?
Ehrhart emphasized that tenants and property owners should take a more geographically concentrated approach when evaluating a retail space location. “We evaluate a two to three-block corridor versus the broader trade area or neighborhood because we think that gives landlords and tenants a much more accurate look for planning and underwriting.”
According to Ehrhart, Everstreet divides retail locations into three separate “corridors” that can determine the likely level of success for a retail space, using three demand metrics – consumer, tenant, and market:
The Destination Corridor draws consumers from a wide geographical area, is tenanted by national brands, and generates heavy foot traffic throughout all periods of the day (in Boston, that translates to 8 AM to 2 AM). Vacancy rates are usually very low, and tenant demand is consistently high. Storefronts rarely become available, and when the properties trade, it’s often through an off-market deal. This corridor checks all three demand boxes, confirms Ehrhart.
The second is the Convenience Corridor, which she says attracts consumers from the immediate trade area for daily goods and services – typically people who live or work nearby. Foot traffic is usually limited to one or two-day periods (i.e., morning commute/lunch hour for daytime-driven areas or nights and weekends for residential areas). There is often a mix of national and local retailers, and demand for retail space is limited. Although there is demand across all three metrics, it tends to be less robust than the destination corridor.
Conversely, the Inactive Corridor typically generates minimal foot traffic, either because the area lacks residential or commercial density, is an underutilized site slated for development, or some failure on the part of the area (an area with a lot of retail vacancy/an area that was developed with the vision of becoming a new vibrant neighborhood but never took off and has chronic long-term vacancy). Local tenants usually populate this corridor, and there are vacant storefronts and frequent tenant turnover. Although this type of corridor is on a spectrum, it generally falls short on all demand metrics, according to Everstreet.
Greater Boston 2024 Retail Performance & 2025 Outlook
Destination Corridor – It was a banner year for destination retail (Newbury Street, the Seaport, Fenway) in 2024. The overall vacancy rate plunged to as low as 3% in some submarkets, as – similar to the office market – there was a continued flight to quality coming out of the pandemic, according to Evertstrret. Back Bay rents achieved a new record high of $500 per square foot (psf) in some spaces, with average rents of $175 to $225 psf (all prices quoted are NNN).
The Seaport continues to break records year after year, post-COVID. Apparel stores are in the $150 psf range, and second-floor food and beverage spaces are achieving rents as high as $80 psf, fueled by a slew of new openings in 2024 (notably F1 Arcade, Museum of Ice Cream, and apparel brand Staud), with more retailers coming online this year. As evidence of the 18-hour nature of the Seaport, WS Development (which owns and operates a significant percentage of the retail in the Seaport) reports that public and private parking garages are near capacity at all hours of the day.
Rents in the Fenway exceeded $110 psf in 2024, with quick service restaurants (QSR) achieving $80-100 psf and fitness/services $60-$70. Notable openings were Bartaco, Chase Bank, and Carbon Health. “I talked to brokers and leasing reps in these submarkets, and everybody wishes they had more space,” said Ehrhart.
Outlook for 2025: Ehrhart predicts fast-paced growth for these corridors, similar to the later years of the post-Great Financial Crisis (2013-2017). National brands will drive vacancy lower as they continue to seek space in these corridors, and secondary locations will benefit from the scarcity of space in prime locations. However, there are potential headwinds on the horizon in the form of the new administration’s proposed tariffs, which could impact supply chains and profit margins.
Convenience Corridor – (The Financial District, Downtown, Kendall Square, and some Main Streets). In 2024, there was a continued bifurcation between corridors as those with strong residential populations (Charlestown, South Boston) surpassed the performance of daytime-only locations. Rents on Broadway in Southie hit the $90’s – a record high. “One broker told me there was a line out the door for every space there,” said Ehrhart.
Office-and-lab-reliant districts have been slow to recover for retailers, with rents largely stagnating for the last seven years, and leasing activity tends to be nodal. Kendall Square rents near the Kendall/MIT T Stop are in the $40-$60 psf range for QSR, and full restaurants are largely percentage rent-driven, with heavily subsidized TI. CVS and Row 34 were notable openings in 2024. (As MIT was conducting its community engagement process for the redevelopment of the Kendall Square gateway, a CVS was the number one request of respondents).
The Downtown/Financial Districts have seen positive incremental growth each year coming out of the pandemic, with 2024 marking the most retail and restaurant openings since 2016. This was partly fueled by the City of Boston’s SPACE Grant program, which provides grants of up to $200,000 over a three-year period to subsidize rents, upfront capital costs, etc. “This brought that cool, unique local flavor to the market, which I think is going to help the downtown to rebuild its identity, ” said Ehrhart. Notable openings were the Vermillion Club and the BCB3 Restaurant Group.
Outlook for 2025: Neighborhood retail space will attract increased interest from national tenants, driving higher rents. However, this may cause friction from neighborhood groups as local retailers begin to be priced out.
Office and lab locations will continue to show positive momentum as more people come back to the office. The strong sales volumes generated in 2024 will attract more tenants to these areas. Smaller spaces (under 2,500 square feet) will continue to be absorbed at a steady rate, but large downtown spaces will take longer and may require redefined business plans to align with post-pandemic demand.
The Inactive Corridor – These corridors comprise underutilized development sites, areas with high vacancy and a lack of retail traffic. Leasing activity is minimal, and they typically don’t follow market fluctuations compared to the broader market.
There were some success stories within this cohort in 2024, however. “Owners of existing properties with low vacancy who were willing to be flexible relative to the original business plan – willing to offer different merchandising than they originally envisioned, offer different terms, etc., were able to get some lights on and kickstart activity,” said Ehrhart. Some landlords achieved rents ranging from percentage rent only to mid- $30s by offering substantial TI packages as an incentive.
Developers with pending projects located in areas with little market demand realize that prioritizing early retail planning, using retail to support the entitlements process, and engaging local audiences to align with community needs can de-risk the initial lease-up process.
For property owners seeking to transform their retail assets within an inactive corridor, Ehrhart offered these suggestions:
- Base retail strategy on integrating underutilized sites into local consumers’ daily routines. Retailers should ask themselves, “How can I incentivize somebody in this area to walk an extra block or to walk in a different direction to start coming here and on a routine basis?”
- During the retail due diligence process, property owners should engage with their audience to understand their behavior, discover what they want and need, and determine what can be done to incentivize their patronage.
- Avoid large, undividable spaces, especially in locations with limited parking access.
- Property owners should consider designing and delivering spaces tailored to specific tenant needs, including providing turn-key solutions where applicable. “This may fly in the face of conventional thinking – we’ll leave it as a shell and carry a big TI allowance because the tenants are going to want to design their own space,” said Ehrhart. “But great local tenants don’t want to design their own space. They think they want to design their space, but when they get into it, they want it most of the way and maybe pick their finishes… because they don’t want to wait 18 months to open.”
Following the presentation, Ehrhart told The Real Reporter that Everstreet has seen a number of deals close that had been initiated before the holiday season, as well as an increase in tours for open retail space.


