‘Something’s Brewing’: Boston Office Market Sees Bump In Leasing Activity After Election

With the uncertainty of the election behind them, leaders in Boston's office sector are starting to feel an optimistic buzz they haven't felt in years. 

In the months leading up to the election, heads of companies put a pause on decision-making as they waited to see which direction the country would turn.

Now that the election is over and executives know that Donald Trump will be the next president, the sentiment around leasing has begun to shift, resulting in more tours and activity, brokers and landlords said at Bisnow's Boston Future of Office event.

"Really, in the last 60 days, particularly after the election … there's been a lot more positive thinking and activity in corporate real estate," Cushman & Wakefield Executive Vice Chair John Boyle said at the event, held Nov. 14 at the Wyndham Boston Beacon Hill.

While the office sector is still facing vacancy rates well above prepandemic levels, an uptick in leasing demand has Boyle and other office leaders feeling positive about the market as the end of the year approaches. 

Boyle said that he had four showings take place in one specific building the day before the event, signaling a larger pickup in the market.

"You don't see four showings very often," Boyle said. "That tells me something's brewing."

Coworking operators like WeWork, which offer more flexibility and short-term lease options, are also seeing the activity.

"You just feel it," WeWork Vice President Nick DeMarinis said. "It's definitely in Boston, but it's also D.C. … New York, Raleigh and others, they're all seeing an uptick."

DeMarinis said that specifically in Boston, there has been an uptick in demand from startups and entrepreneurs looking for space. He said that in locations like WeWork’s 625 Massachusetts Ave. office in Cambridge, it is seeing more revenue coming in from all-access pass holders rather than companies utilizing private offices.

"It's just bursting in terms of our common areas, how they're using the spaces," DeMarinis said.

Several companies are looking for big blocks of space on the market today, panelists said. 

Marci Griffith Loeber, managing principal of Griffith Properties, said that Thermo Fischer was looking for up to 250K SF — though not just in Boston, it is also touring in Wisconsin and North Carolina — and Gillette was shopping around for 200K SF.

Rhode Island-based toymaker Hasbro has reportedly toured space near South Station and Beacon Capital Partners' Southline, which was the former Boston Globe headquarters. The company is looking for roughly 250K SF in areas that would have easy commutes for workers who don't plan to relocate.

"There's a number of companies looking for space that are just trying to upgrade and be competitive as it relates to their brand, their culture, and trying to find high-performance workspace because that is important," Boyle said.

Boyle mentioned Welch's relocation to BXP's Reservoir Place campus in Waltham. In June, the juice and snacks manufacturer announced it was moving from its Concord location, where it operated for more than 40 years, into 60K SF at the Waltham property.

There were also several renewals in the office market last quarter, with 61.1% of the leasing velocity in Boston's office market being renewals, up from 31% in 2023, according to CBRE.

Some of the biggest lease renewals include Bain Capital's 378K SF lease and Arrowstreet Capital's 118K SF renewal at BXP's 200 Clarendon St., as well as New England Development's 36K SF renewal at 75 Park Plaza.

The suburban market has seen an increase in activity as well.

"I talk to other landlords as well, you certainly start to see an uptick in the suburbs, certainly an uptick in activity post-Labor Day, where, if you had a 20K SF tenant post-Covid, that was a unicorn," Loeber said. "Now you're starting to see a couple of those a week tour."

Earlier this week, Cisco renewed its 121K SF lease at Granite Point Mortgage Trust's 1.1M SF Mill & Main office campus in Maynard. 

ZoomInfo announced during a conference call last week that it would be relocating its Greater Boston office in Waltham to 101K SF at Hobbs Brook Real Estate's 404 Wyman St. office building, the Banker & Tradesman reported.

Other companies have geared their attention toward subleasing space in an effort to cut down on capital costs as it relates to construction.

Wolverine Worldwide signed a 10K SF sublease at 90 Causeway St. next to TD Garden. In July, SAP Lean IX subleased 25K SF from LinkSquares at 60 State St. downtown, moving out of its Watertown office.

Sublease availability in the Boston area has dropped over the last year from 4.8M SF to 4M SF at the end of the third quarter, CBRE reported. This decrease is in part due to the slowdown of new sublease space coming onto the market and strong sublease activity of roughly 514K SF in the last four quarters.

"They want the landlord to build out the space much like a WeWork situation and not have CapEx exposure on the move," Boyle said.