2025 Year-End Boston Office Report
The Commonwealth’s office market fundamentals saw pockets of opportunity and growth emerge throughout 2025, but ultimately remained impaired.
The YTD absorption figure registered at -666,212 SF.
Total vacancy closed the year at over 21.5%, marking the fourth consecutive reading of a YoY vacancy expansion. Despite the decrease in occupancy, there are several quantifiable indicators that suggest Boston and many surrounding submarkets are transitioning to a period of stability and growth. Hunneman Research explores those topics later in this report.
Within the city, submarkets remained relatively stable throughout the year. The Financial District recorded its first YoY vacancy decrease since 2020, ending 2025 at 20.4%. This snapped a half-decade streak in weakening occupancy rates within the city’s largest office submarket. The availability rate moved up 5% this year, which is slightly more benign than the years post-pandemic where availability jumped double digits for consecutive years. WilmerHale took top billing this quarter – they renewed for 201,000 SF at 60 State Street, simultaneously shedding 48,000 SF from their initial lease obligation. In the Back Bay, the city’s perennially strongest submarket, vacancy and availability both dropped YoY, posting figures of 13.7% and 17.3%, respectively. The market that saw the most impairment this year was Fenway. This relatively small submarket’s vacancy closed the year at 19.9% - more than 150% higher its 2024 close. This was a function of a whole building becoming available earlier this year at 1325 Boylston Street. Other notable returns to market include Northeastern University’s Network Science Institute posting 110,000 SF at 177 Huntington Avenue, for occupancy in Summer of 2026. In development news, Fenway Sports Group and WS Development’s Fenway Corners project is steadily moving towards breaking ground at 55 Lansdowne Street next to Fenway Park. Approved in 2023, the mixed-use development is expected to become the main offices of Fenway Sports Group and the Red Sox.
Cambridge’s market standing did not materially deteriorate this year. This does not absolve it from its current positioning: the East Cambridge/ Kendall Square submarket closed at 22.0% - one of the highest readings of any city submarket, Boston or Cambridge. The city was registering consecutive readings of sub-5.0% vacancy rates as recently as mid-2022. Sublet availability, while posting a notable decline YoY and QoQ, still remains the one of the highest marks for the Commonwealth, reporting in at 4.7%.
Suburban markets also maintained a relative status quo. The most notable transaction occurred in the 128 West submarket, where Dassault Systèmes renewed their 320,000 SF footprint at Hobbs Brooks Real Estate’s Waltham campus on Wyman Street. This marks the largest office lease transaction for 2025. This submarket represents the largest tertiary market by square footage, and also contains the greatest quantity of Class A office space in the suburbs. 128 West ended the year with a 21.0% vacancy, representing a nominal increase from the close of 2024, at 20.4%. Both 128 & 495 South markets continued their streak of out-performance, and the 128 market especially was buoyed by a flurry of notable lease transactions by Rockland Trust, Arbella Insurance, and the Executive Office of Health & Human Services.
2025 may very well mark the bottom tick of this CRE cycle. Leasing activity is up in a majority of submarkets. Market sentiment – admittedly, a much more difficult statistic to quantify – appears to be shifting. Furthermore, office sales activity appears to have marked a floor for assets, where entrants have been active in both suburban and urban markets. While Synergy has made headlines in years past (and for good reason) we have observed market players like North Colony, RJ Kelly, & Shorenstein Partners step up and make acquisitions. Furthermore, the auctions that have taken place downtown for office buildings like 1 Lincoln Street reinforce the point that these assets have a floor. While painful, no doubt for previous equity and debt holders, this relatively healthy volume of transactions emphasizes that a robust market exists for this property type in the Commonwealth.
For more information please contact:
Mark Fallon, Director of Research & Strategy | mfallon@hunnemanre.com
