Boston Office Market 2025: On the Road to Recovery—Or More Bumps Ahead?
- Webster Realty Advisors
- 4 days ago
- 3 min read
As we move through 2025, Boston’s office market is facing a big moment. While there are a few early signs that things might be improving, challenges like high vacancy, slow leasing activity, and new deliveries to the market are still putting pressure on landlords and businesses alike. There’s hope—but the comeback won’t happen overnight.
Tenants Are Playing It Safe, Landlords Are Sweetening the Deal
Many companies are still being cautious. Instead of moving, they’re sticking with their current space or downsizing. This is especially true in the finance, insurance, real estate, and tech industries.
To attract new tenants, landlords are offering strong incentives like:
Significant T.I. allowance for buildouts
Longer periods of free rent
More flexible lease terms
Landlords with updated buildings—those offering modern spaces, wellness features, and energy efficiency—are seeing more interest from tenants.
Lots of Empty Space, Lower Effective Rents
Vacancy in Boston hit 17.5% at the start of 2025—matching the national average for the first time in years. Across the area, more than 17.75% of space is available, including roughly 3.3 million square feet for sublease.
Even though asking rents look steady on paper:
Overall average: $64/SF
Class A Buildings: $71.15
Class B Buildings: $53.50
…the effective rents tenants are getting are much lower. The delta between the effective rents and asking rents are approaching $10/SF. Landlords are offering big discounts through free rent and improvement packages. Sublease space is going for 25–30% less than direct space.
Suburbs Picking Up Speed
While a majority of downtown Boston submarkets still struggling to get their footing—with office use at about 67% of pre-pandemic levels—suburban markets are seeing more activity.
Here’s what’s driving suburban leasing:
Lower rents and high vacancies in the suburbs, specifically in places like Waltham, Burlington, and Newton
Free and ample parking, easier commutes for employees, and lower operating costs
Buildings that are ready for move-in and offer flexible layouts are doing best.
Finance, Insurance, Real Estate and Tech Tenants Making Smart Moves
Big tenants aren’t leaving Boston—but they’re thinking carefully about where and how much space they need. Many are moving into nicer buildings with better amenities while reducing overall square footage.
With over 5 million square feet of leases expiring this year, it will be very telling how the market responds.
Here are the major factors to watch in 2025:
More return-to-office requirements, especially in finance and legal industries
Companies continuing the “flight to quality”, moving into top-tier buildings
New construction, including South Station Tower and 10 World Trade Center expected to be delivered to the market in 2025 with only 50% of the space pre-leased.
Investor interest picking up again as prices come down
Further Interest rate cuts to help ease financing challenges.
Uncertainty over the impact of Tariffs and rising construction costs.
Final Takeaway: Change Is Coming
This year is full of opportunity—for both landlords and tenants.
Landlords will need to invest capital, in a tough lending environment, into older Class A-/B+ buildings to compete with higher end buildings attracting a lion share of the tenant demand.
Tenants that start the leasing process early will be able to use tenant favorable market conditions to their advantage to lock in lower rates and significant concession packages.
Boston’s office market is still finding its footing, but the pieces for a recovery are starting to come together. For those ready to evaluate existing leases and start the process early, will be able to lock in low rates before market tightening.
At WRA, we exclusively represent tenants and occupiers of space—advocating for our clients’ best interests without the conflicts of interest found at the downtown brokerage firms. Those same firms derive 60% to 90% of their annual revenue from landlords and investors, raising an important question: how can those same firms truly have a tenant’s best interests in mind? If your business is exploring opportunities to reduce costs in today’s tenant-favorable market, give WRA a call.
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