NKF: Global Health Crisis Weighs Heavy on Boston Office Market

At the end of the second quarter, Greater Boston’s office market continued to contend with effects stemming from the ongoing COVID-19 pandemic, according to a new report from Newmark Knight Frank.

Widespread layoffs, particularly within the tech sector, have given way to negative net absorption across all markets. As a result of this, vacancies climbed 50 basis points over the quarter to 12.2% metrowide, according to NKF. However, pre-COVID rent are holding, due in part to the lack of transactions and an inability to accurately mark-to-market. Construction has resumed in the Boston metro, but NKF predicts delayed development timelines for many projects.

“Unsurprisingly, second-quarter performance in the Greater Boston office market faltered under the weight of a global health crisis unlike any we have experienced in modern times,” reads the NKF report. “As restrictions on the local economy continue to loosen, many furloughed employees will continue to return to work and the markets will thaw. While it’s still too soon to gauge the length and depth of this market correction, it will take some time to work through the current challenges.”

For comments, questions or concerns, please contact David Cohen