SUMMER MARKET OFF TO HOT START
After limping through the conclusion of 2016 and coming out of the blocks sluggish last quarter, the Boston market gathered its momentum this quarter and produced strong statistical results. The Hub remained the 10th largest metro in the country with population growth exceeding San Francisco, New York and Los Angeles. Firmly rooted in education, technology and life sciences, the region’s diverse economic base has submitted strong job growth through increased recruitment and skilled labor retention from the area’s leading universities and institutions.
The net effect on the surrounding real estate market has created one of the world’s strongest and tightest urban markets. Recent success has helped the city recruit and expand blue chip talent including both Amazon and General Electric. The influx of large corporate users reflects the strong appeal and international recognition of Boston as one of the premier Global Gateway markets and “must have” locations.
As a result, both the vacancy and rental rents have responded favorably over the first half of 2017 with the second quarter recording 204,700 square feet net positive absorption and asking rate growth to $54.88 per square foot. Across Boston’s eight distinct submarkets the total vacancy rates measures 6.8% which is approaching its lowest level since the dot-com boom of the early 2000’s.
Unlike that period of rapid growth, the market has slowly evolved and strengthened coming out of the Great Recession and fundamentals have been carved from the ground up on solid footing. Looking forward, expect sound market conditions and a diversified economy to guide the greater Boston commercial real estate market to a strong performance over the next several years.