The number of workers returning to Boston offices in person increased 10 percentage points this year, nearly double the national average, Mayor Michelle Wu said at a business breakfast Wednesday morning.
The return to the office — and the use of unused office space in the wake of a pandemic that accelerated a culture of working from home — was a consistent theme in Wu’s speech, as her tenure as mayor has been marked by recovery from the pandemic.
The mayor’s speech comes as she continues to lobby Beacon Hill to allow her to temporarily restructure city property tax burdens to offset a dip in values for office buildings, as demand for them has lessened, and experts anticipate that residents’ taxes will increase to balance the city’s budget in the face of more exposure to lower commercial values.
“Among major American cities, Boston is leading the way on the return to office. The very nature of our city — and the work we do — is driving the speed of our recovery. As a global hub of innovation, being together in person fuels our creativity,” Wu said during remarks delivered at the Boston Renaissance Hotel. “When you’re in the business of doing what’s never been done before, people want to be there when it happens — for proximity, connection, and collaboration.”
The mayor spoke at the Greater Boston Chamber of Commerce government affairs forum to about 700 guests from the region’s business community, pushing an optimistic narrative of a rebound.
She said she recently attended a presentation by Bryan Koop, senior vice president and regional manager at Boston Properties, a firm that’s a major landlord of commercial properties in the city.
Boston Properties estimates that Boston’s occupancy of Class A office buildings, which represent the newest and highest quality buildings on the market, outperformed national levels in both 2023 and 2024 by as much as 20%. In the first quarter of 2024, data showed that occupancy was as high as 96% of pre-pandemic levels.
There’s a different story on Mondays and Fridays, however, as most office jobs have shifted to a hybrid model. For Boston’s Class A buildings, they were only 66% as full as they were before COVID on Mondays and just 36% as full on Fridays.
“Most of all, he flagged what I’ve heard from so many in our business community: this is a major shift in the very nature of our economy that we are still in the process of navigating. To ensure that we emerge in a position of strength, we’ve been focused on protecting the stability and achieving predictability across every metric for families and businesses all over our city,” Wu said.
Wu also announced that as of last month, Boston’s employment rate is at a five-year high.
“We’re seeing promising growth across key sectors with employment up 3% from last year in health care, more than 3% in real estate, and nearly 5% in food and hospitality,” Wu said.
Retail vacancy rates in Boston are substantially lower in Boston than other major cities, she said, comparing the Hub to Chicago, San Francisco and New York. The number of empty retail spaces in Boston was between 2.3% and 3% in 2024, according to Marcus & Millchap, she said.
Comparatively, Chicago’s vacancy rate was 5% — 30% within the Chicago Loop; San Francisco’s was 7.7%, and New York’s was 11% at the beginning of 2024.
“Retailers have shown confidence in downtown consumer activity, signaling a promising future. Boston’s retail market continues its strong trajectory, drawing from robust remote work trends and a dearth of new development, keeping the vacancy rate low,” Thomas Shihadeh, vice president and regional manager at Marcus & Millichap, told Forbes of the findings earlier this year.
