The Cost of Renting Office Space in Boston
Thanks to its academic status and thriving innovation scene, Boston is considered one of the top business hubs on the East Coast. In particular, the city and the surrounding areas have become the destination of choice for many startups, not only due to the availability of talent and funding, but also given the quality and diversity of office accommodation options.
In this article, we offer detailed insights into the cost of renting office space in Boston, district by district.
Contents
Office market trends in Boston
Over the past decade, the Boston office space market has seen fluctuating performance, witnessing shifts in demand and supply. Initially, the growth of the tech and life sciences sectors contributed to the expansion of the office market, with the development of new and modern spaces that could accommodate the requirements of these occupiers. Low vacancy levels translated into increasing asking rates, in particular in areas like East Cambridge and Sommerville, while other tenants were pushed out of the market as they couldn’t always compete with the budget of occupiers like MIT, Novartis, and Google.
More recently, trends have reversed due to post-pandemic tenant downsizing, which has pushed vacancy rates up to record highs, especially in areas like downtown Boston. Supply vastly exceeds demand, so rates have decreased across the board, except for the best Class A properties, where prices remain high.
Also worth noting is the surge in demand for mid-sized office units of 10,000 square feet and above. This segment is one of the main drivers of leasing activity in Boston, generating substantial price increases but at the same time, making it easier to find affordable deals for smaller units.
Costs to rent office space in Boston
Prime office locations in Boston
Financial District, the largest office sub-market in the downtown area, and the most directly affected by downsizing and elevated vacancy rates that have driven asking rates to $68 / sq ft for all classes and $74 / sq ft for Class A space.
Fenway / Longwood, dominated by occupiers in the higher education and medical sectors, is among the priciest office locations in downtown Boston, with averages of $80 / sq ft for all classes.
Seaport, a central waterfront location offering proximity to all services and amenities, and a long-standing favorite for office-based businesses. Although lease rates are affordable, averaging $60 / sq ft, Seaport is also one of the few sub-markets where some properties exceed the $100 / sq ft mark.
Back Bay, the second largest office market in the Boston CBD and a popular choice among startups and occupiers involved in the tech sector, offers especially good value for Class A offices, with averages of $65 / sq ft.
Other office locations in the Boston area
Cambridge has a reputation for being one of the most expensive office markets in the United States in sale prices, although this isn’t always reflected in asking rates. There are significant disparities in office space costs, going from an all-class average of $75 / sq ft in East Cambridge to $55 in Alewife.
Allston-Brighton, an innovation district within the urban ring with a strong presence of the education sector, being the home of Harvard University, offers an abundance of incubator space and possibilities for networking and collaboration with big industry players. Average asking rates for full-service properties experienced a slight decline since 2020, and currently are in the mid $30s / sq ft.
Suburban markets, such as those around the 128 and 495 Belts, offer the most affordable office space, with average asking rates in the mid $20s, and below $30 / sq ft for Class A space.
Additional costs to consider
Depending on the terms of the lease agreement, building tenants may be responsible for utilities and maintenance costs. Office occupiers should be aware that the local cost of utilities like electricity is more than 66% higher than the national average.
Regarding operating expenses, Boston remains one of the 5 most expensive office markets in the nation, with averages in excess of $10 / sq ft.
Some leases include property taxes in the asking rent, while others may pass these expenses to the tenant. A recent decrease in office valuations is especially affecting assets in downtown Boston, but commercial tax rates remain high at $25 per $1,000 of assessed value.
Costs of flexible office space in Boston
The cost of flexible office space solutions varies depending on the membership package chosen, but recent data comparing hot desking rates in some of the world’s leading markets situates Boston in the top 20, with monthly fees at around $330 / desk.
Monthly costs for allocated desks in flexible office spaces in Boston average $740, and private offices usually start at $1,000 / month, going up to several thousand dollars for small team offices. Overall, these rates make Boston one of the priciest locations for flexible office space in the North American market.
Conclusion
Office space in Boston is available across a wide range of price points, determined by multiple factors such as location, specifications, and current supply-demand trends. With the detailed cost breakdown provided in this article, Boston business owners can be make the best decision about the location that best suits their needs.
You can explore the space available in Boston office buildings here.
Looking for Office Space?
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Further Insights
Want to read up on the other major U.S. commercial markets or learn about more office space topics? Check out some of our recent articles below.
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