Who’s Driving Today’s Demand for Commercial Space?

A trend CRE owners may have noticed over the past year is that, while Massachusetts’ commercial real estate market remains dynamic, it still has not returned to pre-COVID levels (due in part to the pandemic’s lingering shift toward hybrid and remote work). Despite this, several key industries continue to drive our strong local demand. These sectors—unsurprisingly—remain not only our leading CRE investors but also a backbone of the state’s economy.

Life Sciences & Biotech: Still the Powerhouse

Life sciences and biotech continue to dominate demand, particularly in Boston, Cambridge, and along the Route 128 corridor. Lab and R&D users are still seeking flexible, modern space as research funding and innovation remain robust.

Advanced Manufacturing: Quiet but Steady Growth

Advanced manufacturing—including robotics, defense tech, and semiconductor production—is expanding across central and northern Massachusetts. This growth is supporting demand for modern industrial and flex facilities.

Healthcare & Medical Services: A Reliable Constant

Healthcare networks are expanding outpatient services, driving interest in medical office buildings, clinics, and specialty care spaces statewide.

eCommerce & Logistics: Holding Firm

Warehouse and distribution space continues to be absorbed steadily as eCommerce and last-mile delivery companies expand, with suburban locations near major highways in particularly high demand.

Industrial Spaces: Resilient

Industrial space remains one of the stronger-performing sectors, with absorption holding up better than in others and demand for manufacturing, warehouse, and logistics facilities continuing to support steady activity.

Office: Current Slump 

As previously mentioned, the office market in Boston continues to face post-COVID challenges. A joint report from the Boston Policy Institute and Tufts University projects that assessed values of Boston office buildings could drop 35–45% from their 2024 levels, reflecting ongoing softness and elevated vacancy rates. However, it is worth noting that recently there does seem to be a subtle shift in employer expectations: HereBoston reports that 57% of local employers expect staff to be “onsite more frequently” in the coming months, though hybrid arrangements remain prevalent.

Bottom Line:

Segments of the Massachusetts commercial real estate market may seem unpredictable right now, with office space under pressure and hybrid work reshaping demand patterns. But industries like life sciences, manufacturing, healthcare, and logistics remain strong.

As experts in the local market, CCA is here to help you navigate this unique period. If you’re looking to sell or lease your space—or explore converting your property to meet the needs of the sectors currently thriving—our team can help you maneuver these opportunities and position your property for optimal success. If you need additional guidance, please don’t hesitate to reach out.