GB Sublease Space Showing Some Signs of Finally Burning Off According to CRESA Report
February 17, 2025
Boston — Nationally many large employers like Amazon and JPMorgan have mandated a return to five days in office. Yet, in Greater Boston, employers seem content to continue offering hybrid arrangements. According to a market report by CRESA, a Greater Boston Chamber of Commerce survey shows over 70% of employers surveyed have not changed their return-to-office policies over the past year, citing employee preference as the main reason.
The Downtown (Boston) Market Report shows some signs of improvement for office assets, mainly due to the robust demand for the newly constructed Class A trophies making their way to the Hub. The market has exceeded over 20% vacancies in Downtown and the sublease market is contributing to the rise, with 505K SF of leases expiring and becoming direct vacancies in 2024, according to CRESA’s analysis.
“As we see some stability coming back to area workplaces with significant national employers publicly announcing requirements for four to five days in the office, we anticipate the lackluster occupancy and demand cycle within which we have been stuck the last 24 months may start to change as 2025 unfolds. That said, today’s reality reflects lingering changes in behavior post-Covid, and we anticipate a buyer’s market for the foreseeable future,” said Adam Subber, Managing Principal, Cresa.
The report indicates, that at 3.7M SF, the sublease market is now down over 500K SF from its peak in Q3 2023. With reduced demand across the market, it is not expected to fall below historical averages any time soon. Still, with over 1M SF of leases on the sublease market expiring in the next three years, expect to see continued impacts on the direct market going forward.
“With new opportunities to secure Class A downtown space at favorable terms for occupiers, the shift towards these desirable mid- and high-rise properties will continue, while other markets like Cambridge and the Life Sciences industry remain dependent on improved capital markets and investment cycles to rebound.” The full 2025 CRESA Market Insight Report is available online here
Adam Subber
