As a result of the pandemic, many people have made short and long-term lifestyle changes. When the pandemic started, urban locations were hit hard, and many people fled the cities due to the dense population and reduced opportunities for social distancing. However, the attractive lifestyle a post-pandemic bustling city provides will draw some back. The CBRE reports, “There are no indications that 2020’s decline in urban multifamily demand is permanent or there is an impending return to the hollowed-out cities of the 1970s and 1980s. Yet urban submarkets will lag in the multifamily sector’s overall recovery. Lower-density and less-expensive suburban submarkets held up remarkably well in 2020 and are positioned to lead overall market performance in 2021”.
In the last nine months, many people have had their world turned upside down, both financially and emotionally. The global pandemic we now find ourselves in has disrupted many parts of our lives, including the real estate industry. Many Americans have physically uprooted themselves, fleeing cities, and seeking more suburban living. With the ever-changing nature of the pandemic, where does that leave commercial real estate?
Over the last 12 years, the demand for urban apartments has been insatiable. Renters have enjoyed the flexibility and convenience of apartment living, realizing how fewer maintenance obligations allow more free time. Apartment living is no longer thought of as the step before you purchase your own home, but instead, an opportunity for people to enjoy life. This has resulted in increased demand for apartments in both urban and suburban communities.
Hospitality has been one of the real estate sectors most negatively affected by Covid-19. As in all U.S. gateway cities, the impact on Boston short-term rentals has been acute. Prior to February 2020, the short-term rental market in Boston had been thriving, with an estimated 61% occupancy rate during the summer of 2019, according to data from Mashvisor. But with the unprecedented drop off in domestic travel and the closing of the U.S. borders to foreign travel, short-term rentals quickly ground to an abrupt halt in March.
Over the past ten years, one question has loomed large in the minds of real estate investment professionals: what will inevitably be the next event to slam on the brakes? The good news is that we now have our answer.
New Haven’s international profile and high rental demand is attracting investors from around the Northeast region. Located along the I-95 and I-91 corridors, New Haven enjoys Amtrak and local rail service to both New York and Boston. The city is a thriving community of generational, ethnic, and educational diversity, and is home to a number of educational, healthcare, and cultural institutions. Its emphasis on education and health sciences contributes to steady job growth, while New Haven’s arts and entertainment scene makes it an enjoyable community to call home.
What is bringing Boston investors into secondary markets north of the city? Value-add opportunities in the Merrimack Valley are attracting investors who have been priced out of the Boston area. Situated along the northeastern Massachusetts and southern New Hampshire borders, this region is experiencing economic growth and improving demographics in submarkets including Lowell, Lawrence and Haverhill.
Bridgeport, Conn. represents one of the best multifamily investment opportunities in the state.