As we look to serve the needs of property owners and investors in the mid-market segment in the regional submarkets across the Northeast, we’re particularly excited to have a growing presence in the Boston market. Frankly, we believe it’s a great time to be in the Boston area because that commercial real estate market is one of the brightest spots in the entire country. This is according to a recent report by Moody’s Investors Service, which tracked commercial real estate prices in major markets across the U.S. during the 12-month period that ended September 30.
In fact, prices across Boston’s commercial real estate market are nearing levels that have not been seen since nearly five years ago; it’s great to be writing words like this now because Boston is actually setting the pace in bouncing back from the country’s recent economic downturn. With our newly expanded Framingham-based investment sales team, we are in a stronger position to support multifamily and commercial investors in Boston and the MetroWest region.
According to Moody’s, the Boston market posted some very strong numbers. It was the strongest commercial real estate market in the country during that 12-month period and the one closest to recovering the full value lost during the market drop after the recession and 2008 financial crisis. Today, Boston’s commercial values are less than 1 percent below their market peak in December 2007. It is the only market that is even close to reclaiming its peak value — Washington, D.C., and New York were a distant second and third, falling short by 5.7 percent and 7.5 percent, respectively, as of Sept. 30.
Moody’s also noted that prices in the Boston local commercial real estate market rose 10.4 percent over the prior 12-month period — which led all U.S. major metropolitan areas – a figure more than 25 percent higher than the second place finisher (New York, which had an 8 percent growth rate). Just for the record, San Francisco ranked third with a 7.8 percent price rise over the past year.
Boston’s commercial real estate market is in a perfect storm in reverse, according to a recent report by the New England Real Estate Journal. The factors that are creating “this perfect building environment” include:
• Liquidity — Lenders are making financing available again, at least for Boston projects
• Proposed and new projects that were put on hold when the financial crisis hit are now moving forward
• Low interest rates – And lenders (see above) that are eager to lend
• A positive attitude — New projects begin, and they spark additional growth
Like we said earlier, we believe it’s a great time to be in the Boston market. If you’re a property owner or an investor in the mid-market segment and want to know more about the Boston market or are ready to talk strategy, we’d love to hear from you.