The Commercial Real Estate sector in Boston is following a very similar path that the rest of the industry is; it is growing. Urban Land Institutes Emerging Trends in Real Estate Forecast pegged Boston as the #6 city Nationwide for the future prospective of a Commercial Real Estate recovery. Some of the main arguments supporting Boston with such a praiseworthy ranking is due to the fact that there is a heightened presence for biomedical research, development employment, high-tech industries, and finally, the strong investor interest.
Urban Land Institutes survey showed respondents to be rather optimistic about the Real Estate recovery as a whole, stating that conditions are far superior to those from a year ago. Despite this, it must be noted that overall sentiments still indicate that the recovery is moving slowly; however a recovery by definition is a wonderful realization to finally have.
There is a shortage of inventory in new Commercial Real Estate, however with the job market improving there is an added benefit as much of the retail, industrial and office spaces are becoming occupied. The frequency of these forms of transactions in the market are anticipated to improve even more drastically as 2013 gets underway. Furthermore, investment capitals interest in Commercial Real Estate with other asset classes offering too much volatility or even smaller returns.
Finally, the survey highlighted some helpful tips as to where the best investments currently lie in ones local Real Estate market. Many of the Downtown Commercial spaces, and even housing also for that matter, are incredibly expensive and any immediate appreciation in prices is not likely to occur anytime soon that would make the investment a sound and lucrative one. On a similar end, the neighborhoods or districts where there are low-barrier-to-entry markets present, investment properties will not be as fruitful due to these areas rapid overbuilding which diminishes the propensity for higher rental values in the future. Rather, the more strategic move is to invest in Commercial property in areas that are a hybrid for hip residential neighborhoods meeting at the border with new Commercial sectors. It is here where studies have shown corporations being more likely to pay higher rents for these periphery locations characterized by generally more efficient Green designs, and lower operating costs.
More Information: Boston Business Journal