The Boston office market is facing a challenging start to 2025 with a record-high vacancy rate of 17%, reflecting ongoing struggles in the commercial real estate sector post-pandemic. Rents in downtown areas, including Post Office Square, declined by 1.6% in 2024. The life sciences sector, once booming, now shows a vacancy rate exceeding 30%. Despite some new leases, renewals dominated the market, indicating a shift towards stability and tenant preference for highly amenitized and prime locations.

Nationally, the office vacancy average is 20.9%, with San Francisco, Manhattan, Los Angeles, and Washington, D.C., also experiencing high vacancy rates. In Boston, new office buildings still attract tenants, but construction has slowed. Notable projects like the South Station Tower and developments in Kendall Square and Back Bay continue, driven by significant pre-lease agreements.

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