B
oston’s retail scene remains one of the most resilient in the U.S., according to Marcus & Millichap’s Q3 2025 Boston Retail Market Report. Despite the early‑year shock of nationwide pharmacy shutdowns, the metro’s vacancy rate climbed only to 3.3 %—still the second‑lowest among major U.S. markets—thanks to robust demand in the city’s core and steady investor interest.
“Early‑year disruptions from national pharmacy closures didn’t derail Boston’s long‑term stability,” said Thomas Shihadeh, Vice President and Regional Manager at Marcus & Millichap. “The third quarter underscores the resilience of the core, where high incomes and mixed‑use growth keep retail thriving even as suburbs soften.”
Key takeaways:
* **Vacancy** – 3.3 % (up 50 bps YoY), largely driven by over 1 million sq ft vacated by chains such as Walgreens, CVS, and Rite Aid in the first half of 2025.
* **New deliveries** – Only 108,000 sq ft completed in the past year, the lowest on record for the metro.
* **Rents** – Average asking rent rose 1.6 % YoY to $22.32 / sq ft, matching the long‑term growth pace.
* **Investment** – Transaction volume grew 15 % YoY, with buyers targeting high‑traffic urban corridors and the Route 128 North corridor, where supply remains tight and demand strong.
Shihadeh highlighted that Boston’s fundamentals—constrained supply, high household incomes, and dense mixed‑use developments—continue to attract retailers and investors alike. “Even amid short‑term headwinds, Boston’s fundamentals are among the most stable in the country,” he added. “Tight supply, resilient tenant demand, and steady investor activity set the stage for continued strength into year‑end.”
The report projects that Boston’s blend of affluent urban demographics, dense mixed‑use projects, and limited new supply will sustain performance, even as national retail trends stay uneven.
