Boston Retail Market Report

Narrow pipeline restrains available space in the core. Boston remains one of the nation’s tightest retail markets, as a 3.1 percent vacancy rate marked the third-lowest measure among major U.S. metros entering April. Land constraints continue to present a hurdle to development, with stock expansion not exceeding 1 percent per annum since 2015. This has been felt acutely in the core and nearby submarkets. In the first quarter of 2023, Cambridge and Close-In Suburbs North reported the lowest vacancy rates in the metro, at 1.5 and 1.7 percent, respectively. Boston proper was slightly higher at 2.1 percent, owing to the challenges faced by retailers in select office-dense corridors. More slack has been noted in the urban areas farther from the CBD, where supply growth has been more consistent. Over 1.6 million square feet remained unoccupied in Worcester at the close of March, the most of any submarket in the metro.