Boston is the largest city in the state of Massachusetts and is considered to be the cultural and the economic center of the whole New England region. Commercial real estate is one of the reasons for this city being balanced for continued success in nurturing new enterprise. More and more, businesses are discovering new commercial real estate opportunities where purchasing power, access and investment form a framework for growth.
Boston has experienced an ongoing economic recovery. Many industries, especially the tourism industry are regaining ground with commercial real estate. Commercial real estate in Boston is home to important key industries such as tourism, financial services, technology, manufacturing, as well as providing the headquarters for several major banks. Industrial space provides homes for some of the most successful businesses such as Chase Corporation and UFP Technologies.
The asking price for offices in Boston was $127.56 PSF. This represents a decline of 2.6 percent. The peak price was $ 146.98 PSF in 2008. Currently the price is 14.8 percent lower. The month of August saw the lowest price of $124.38 PSF. The sale price for office property reached the highest in 2008 at $167.28 PSF. Currently the sale price is 25.8 percent lower.
The total amount of office property available for sale increased by 6.6 percent. The available property for sale has seen a steady increase for several months.
Office space consists of approximately 72.9 million SF situated throughout various submarkets. The office market continues to see a slight stabilization. The overall vacancy rate is 11.96 percent with absorption of 311,871 SF, which is an improvement over the last quarter absorption of 111,484 SF. The asking rents overall have remained stable at $35.94 PSF.
Asking prices for retail property have fallen to a new low. The asking price for retail property was $155.26 PSF. This represents a decline of 3.2 percent. The high in 2008 was $176.30 PSF. The average sale price has been falling and dropped by 9.6 percent during the last five months. The average high in 2008 was $162.31 PSF. Currently the sale price is now $125.69 PSF, which is 22.2 percent lower.
For several consecutive months the dollar volume for available retail property has been increasing. The total number of available retail properties has fallen by 7.3 percent. Interest in listed retail properties has increased by 12.2 percent.
Retail property has seen an increasing trend in available SF for sale. Over the past year there has been a 13.4 percent drop in available for sale. Retail property has taken longer to sell compared to last year. Market time is approximately 159 days, which is 7.9 percent longer.
The asking lease rate for retail property was 16.46 PSF. This represents a decline of 1.6 percent from last year. In 2008, the high for asking rates was $182.16 PSF. Currently it is now 10.2 percent lower. The lowest was seen in May at $16.61 PSF.
The total number of spaces available for retail has increased by 10.1 percent. The retail spaces currently available reflect a 17 percent increase from last year.
The asking price for industrial property was $72.69 PSF. This represents a decline of 2.7 percent. The average high for asking prices for industrial property was $90.29 PSF set in 2008. Interest in industrial property for sale increased by 19.8 percent this past year.
The highest average sale price for industrial property was $92.31 PSF in 2009. Currently the sale price dropped by 29.9 percent, however, the current price is 8.5 percent higher than the low set in 2010 of $58.48 PSF.
The industrial market consists of roughly 173 million SF. The average asking lease rate was $5.62 PSF. The vacancy rate is 11.2 percent.
Boston's superb facilities and infrastructures attract many businesses to office space in the area. The city of Boston is a place of diverse business, rich history and esteemed education institutions. Boston offers a large number of economic incentives that include programs like Create Boston, Onein3 and the Green Initiative. The Back Streets Program is in place to support many small commercial businesses. The city also offers financing programs for new and existing businesses such as Restore Boston.
Boston has a development incentive program offered as a tax incentive designed to foster business growth. Companies who participate can receive both local and state tax incentives for commitments. There are special programs that provide qualifying businesses unique features for starting a business in the state of Massachusetts.
EXP Realty Massachusetts Market Trends exprealty.com/ma/trends/
Commonwealth of Massachusetts Business Portal www.mass.gov/portal/business