Boston office vacancy forecast to fall 10 bps to 19.1%, Marcus & Millichap says

Boston-area office vacancy is projected to fall 10 basis points year over year to 19.1% in the fourth quarter, according to a Marcus & Millichap report covered by Connect CRE. That follows the market's first annual vacancy dip since 2022 earlier this year.

The report attributes the decline mainly to Suffolk County, where more than 1.3 million square feet of net absorption in the first half pushed vacancy from 21.6% in June 2025 to 20.4% a year later. Eight other submarkets also tightened, and Worcester stayed low. Cambridge moved the other way, with vacancy up 250 basis points to 22.8%, though it remains the metro's priciest market at about $72.54 a square foot.

Rents are barely moving: the metro average is expected to reach $38.75 a square foot by year-end, up 1.2% year over year. Average sales fell from more than $370 a square foot in 2022 to about $283 by mid-2026, and average cap rates widened from 6.7% to 7.7%. A 1.2% rent gain against 100 basis points of cap-rate expansion leaves little room for values to recover on income alone.

Marcus & Millichap projects about 3.3 million square feet of office space to deliver in 2026, mostly a handful of projects larger than 300,000 square feet. Demand rests on the 25,000 jobs Boston is expected to add in 2026, largely in education and health services. Finance and professional and business services remain below their 2022 employment peaks, and the report flags uncertainty over research funding and softness in parts of life sciences as risks to office demand, particularly in the metro's pricier submarkets.