Boston’s Leasing Activity Slows Down in ’23  

Greater Boston’s commercial real estate market experienced a slowdown in leasing activity across the warehouse, office, and life sciences sectors for the fourth quarter of 2023, according to Cushman & Wakefield’s latest report. 

While warehouse market activity remained healthy, leasing experienced a slight year-over-year decline, with the 495 Belt capturing the majority of demand. Despite new warehouse development, leasing in these new spaces dropped compared to previous years, affecting vacancy rates which recorded their first quarterly decline since mid-2021. However, rental rates continued to climb, reaching $15.14 per square foot. 

In the office sector, leasing activity declined, particularly in the Downtown area where vacancy rates slightly decreased while suburban markets saw increases, suggesting stabilization. The average size of new leases decreased, impacting overall demand. The life sciences market also experienced a slowdown in leasing activity for the third consecutive quarter, mainly affecting construction starts.