Boston's Financial District skyline seen from the harbor

Greater Boston Office Vacancy Hits a Record 24% as Construction Stops

Greater Boston office vacancy hit a record 24% in Q3 2026, per Newmark, as construction fell to zero. CBRE saw downtown leasing pick up.

by AI reporter
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Greater Boston’s office market set another vacancy record in the third quarter of 2026, even as leasing in some downtown buildings picked up and Cambridge posted a fourth straight quarter of positive demand. Two brokerage reports released this month describe a market that is splitting by location and building quality, with no new office towers under construction.

The reports, from commercial real estate firms Newmark and CBRE, measure slightly different areas and use different methods, so their numbers do not match. Read together, they offer a clear picture of where Boston’s office economy stands heading into 2027.

Regionwide: a record 24% vacancy

Newmark’s third-quarter 2026 Boston office report puts Greater Boston vacancy at 24.0%, a record. The region posted negative net absorption, the measure of space occupied minus space vacated, of 308,852 square feet in the quarter and 1,259,065 square feet so far this year. About 2.4 million square feet was leased in the quarter.

Newmark also reported that office construction in the region has fallen to zero for the first time in 20 years. With no new supply coming, any improvement in vacancy will depend on tenants taking existing space or on buildings leaving the office inventory through conversion.

Downtown Boston: two readings

For Boston’s central business district, Newmark measured vacancy at 23.2%, also a record and about 40 basis points higher than the prior quarter. Its 20-year average is 12.4%. Net absorption downtown was negative 396,621 square feet, driven in part by Northeastern University vacating 177 Huntington Ave.

By submarket, Newmark put vacancy at 24.9% in its Downtown submarket, 18.3% in Back Bay and 23.5% in the Seaport. Sublease space, offered by tenants that no longer need it, made up 14.8% of downtown availability. Newmark noted that Amazon put about half of its space at 1 Boston Wharf Road on the sublease market.

CBRE’s downtown figures, released Oct. 9, are somewhat more upbeat. CBRE measured downtown vacancy at 18.5% with positive net absorption of 62,741 square feet. It counted 1.27 million square feet of leasing, about 80% of it in Class A buildings, and 4.3 million square feet of active tenant demand. CBRE put the average downtown asking rent at $66.12 per square foot and reported no projects under construction.

The gap between the two vacancy rates likely reflects differences in how each firm draws downtown’s borders and which buildings it tracks, not a contradiction in the underlying trend: both show a market with ample space and demand concentrated in top-tier buildings.

Rents and big leases

Newmark reported average downtown Class A asking rents of $72.72 per square foot, down 0.3% from a year earlier, and Class B rents of $50.66, up 0.8%. It counted 164 active tenant requirements totaling 4.4 million square feet.

Among the quarter’s largest leases, Newmark listed an Axis Communications renewal of 91,994 square feet in Chelmsford, HNTB’s 78,420 square feet at 115 Federal St. and Greenberg Traurig’s 77,745 square feet at 680 Atlantic Ave.

Cambridge and the suburbs

Cambridge vacancy stood at 25.0% in Newmark’s count, but the market absorbed a net 98,051 square feet in the third quarter, its fourth straight positive quarter. Newmark said artificial intelligence companies account for 19.4% of tenant requirements there. Suburban vacancy was 24.5%.

Offices to homes

Newmark counted 2.8 million square feet of office space in Greater Boston involved in residential conversions, representing 3,311 housing units. It noted a groundbreaking at 95 Berkeley St., planned for 92 units. Boston’s conversion effort is one of the ways the city is trying to put empty floors to use while adding housing.

Commuting and the wider economy

Office demand depends partly on how often workers come in. Newmark reported MBTA commuter rail ridership up 17% from a year earlier, while subway ridership was up 0.2%. It also cited a 4.1% unemployment rate for the Boston metro area in August and noted that the Associated Industries of Massachusetts Business Confidence Index remains below neutral.

For more on hiring trends, see the Boston Job Market page and our September Massachusetts jobs report. Recent downsizing at large employers, including HubSpot’s restructuring, is one reason sublease space remains elevated. Our Boston business and economy hub collects related coverage.

Why it matters for Boston

Commercial property is a major part of Boston’s tax base, so a prolonged high vacancy rate can affect assessed values and the city’s property tax mix. It also shapes the health of downtown restaurants, retailers and transit. The third-quarter data show the pressure has not eased overall, but the pickup in Class A leasing and Cambridge’s run of positive absorption suggest demand is concentrating rather than disappearing.

Photo: Boston’s Financial District seen from the harbor. Photo by Sathiya raj via Wikimedia Commons, licensed CC BY-SA 4.0. Cropped.

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