B
oston's office market showed signs of stabilization at the end of 2024, driven by strong renewal activity, according to CBRE's year-end report. The downtown Boston office market saw a notable 1.9 million square feet of leasing activity in the fourth quarter, with large renewals dominating the scene as prominent firms reaffirmed their commitment to the area.

    The sublease market and overall asking rents continued to stabilize, indicating cautious optimism. However, the gap between Class A and Class B/C assets widened due to a shortage of high-quality space. The Cambridge office market recorded 171,000 sq. ft. of negative absorption in 2024, an improvement from 821,000 sq. ft. in 2023.

    The suburban Boston office market saw a decrease in leasing activity in the fourth quarter, with new subleases dropping significantly. Renewals accounted for over a quarter of all leasing activity. The Greater Boston life science market faced challenges due to oversupply, but demand stabilized after a decline from its 2022 peak.

    In 2024, 7.6 million sq. ft. of new lab space was delivered, with 125,600 sq. ft. of negative absorption in the fourth quarter. Demand for lab space ended the year at 2.2 million sq. ft., a 15.9% increase from 2023. The Greater Boston industrial market stabilized as new supply was delivered amidst heightened renewal activity and cautious tenant behavior.

    Renewals kept overall annual leasing activity higher than pre-pandemic records, but fewer new deals and space givebacks neutralized quarterly net absorption to -96,984 sq. ft. The market appears to be adjusting to the post-pandemic "new normal" with more balanced supply and demand levels.