Small commercial spaces are experiencing unprecedented demand in Massachusetts while larger spaces struggle to find tenants, according to a leading commercial real estate expert who sees this trend reshaping the market.
Rob McGarry, Senior Associate at O’Brien Commercial Properties, reports striking occupancy differences between small and large spaces. “We have a building right next to us that’s 100% occupancy,” McGarry says, referring to a property offering individual offices between 100-500 square feet.
The Market Divide
McGarry highlights two segments that continue to outperform the broader market. Small office suites ranging from 100 to 500 square feet remain in high demand from startups, solo professionals, and hybrid teams seeking flexible space. Meanwhile, small bay industrial units between 1,000 and 5,000 square feet attract light manufacturers, logistics firms, and service providers who value affordable footprints and easy access to regional transportation networks.
The contrast in market velocity is dramatic. “These spaces are staying on the market for two to three months, compared to some of the larger spaces, which are anywhere from 12 to 16 months,” McGarry notes.
Driving Forces
According to McGarry, this shift reflects fundamental changes in how businesses approach space needs. “We’re finding that a lot of small businesses are trying to mainstream keep their costs down low by leasing a smaller space, both in the office and industrial sector,” he explains.
This trend emerged during COVID but has shown staying power, McGarry observes. While some businesses that started during the pandemic drove initial demand, the preference for smaller spaces appears to be evolving into a longer-term shift in market dynamics.
Investment Implications
For property owners and investors, McGarry suggests this trend requires rethinking traditional approaches to commercial space. Properties that can be effectively subdivided into smaller units may find stronger demand than those configured for single, larger tenants.
Looking Forward
McGarry predicts this preference for smaller spaces will persist. “We think this is going to continue over time, and that’s going to be the trend for the next years to come,” he says, suggesting property owners may need to adapt their offerings to meet this evolving market demand.
