Boston is one of the nation’s top options for CRE investors. In 2024, the area ranked 8th nationally for total CRE sales volume ($10 billion+) and was third for cross-border investments. In most years, the office sector is the primary driver of sales volume. The market features a large selection of high-quality buildings, a dynamic tenant mix, and one of the highest educational attainment levels in the country—positioning it to attract high-value-add, white-collar operations. Additionally, the metro’s relative supply constraints typically help assets retain value and allow landlords to sustain high rents. As a result, major institutional buyers have long sought to include Boston assets in their portfolios.

In the city of Boston, home to top submarkets such as Downtown, Back Bay, and the Seaport, Colliers is tracking more than 16 million SF of available space, representing more than 23% of inventory. Both numbers are near all-time highs and signal distress across many assets. Numerous suburban properties are similarly challenged. Due to these weak fundamentals, shifting investor preferences, and capital markets upheaval, there has been a steep decline in both the number of office deals closing and the pricing of those transactions. Correspondingly, and in a departure from the norm, multifamily assets surpassed office last year to comprise the largest share of sales volume. Four-quarter office volume across the metro is now more than 70% below its peak from the five years leading up to COVID—a far steeper drop than in any other sector.

Colliers Insight
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Office market sales are poised to increase, creating opportunities for investors. Net absorption is trending in the right direction, and though still muted, sales volume has edged up in recent quarters as some buyers have slowly returned. Recent investment activity differs significantly from pre-COVID norms, with deals for smaller, lower-quality buildings comprising an outsized share of transactions. Many of these assets are trading for under $200/SF—often at less than half their previous sale prices. This dynamic allows new owners to enter at a lower basis, unlocking strategies that may not have penciled just a few years ago.

Since the beginning of 2024, 44% of office buildings sold in the city of Boston have been either slated for conversion (to apartments, student housing, or hotels) or purchased by users. Large, Class A deals have been extremely rare, especially when excluding partial interest transfers. Regardless of asset size, locally based private investors have been the most active. Investors buying into Boston today may be able to offer lower asking rents, positioning them to compete more effectively for tenancy.

Given the market’s structural advantages, as office fundamentals turn the corner and more distressed assets emerge, Boston offers strong potential for investors looking to deploy capital.