Regional Summaries

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Boston, MA

The sharp slowdown in rent gains observed in 2016, with outright declines in the fourth quarter, extended into the first quarter of 2017 in the 219,110-unit metro Boston apartment market. Vacancy also increased thanks to the first installment of what is projected to be another huge year for new apartments completing construction. Reis reports a vacancy rate of 4.9% in the first quarter of 2017, up 30 basis points over the quarter but still down 10 year-over-year. Rent weakness in the fourth quarter of 2016 continued into the first quarter of 2017, with the average asking rent up just 0.3% to $2,131 per month and the average effective rent down 0.3% to $2,047 per month. VIEW APARTMENT LISTINGS >
The metro Boston industrial market features high rents and booming supply in the unusually large 64.9-million-square-foot Flex/R&D market, and an absence of speculative development despite low vacancy in the 132.1-million-square-foot warehouse/distribution market. Reis reports a first quarter 2017 vacancy rate of just 8.7% for warehouse/distribution space in metro Boston, down 60 basis points during the quarter and down 100 from a year earlier. For warehouse/distribution space, rents increased 0.5% by both measures over the quarter to $6.59 psf and $5.67 psf. The year-over-year gains are 1.9% and 2.2%, respectively. Metro Boston is a national science and research center, and the first quarter vacancy rate for Flex/R&D space is 11.2%, down 110 basis points over three months and down 130 basis points over 12 months. The need to compete for sites with other land uses keeps industrial rents high in metro Boston and drives Flex/R&D development to multiple floors. The average asking rent for Flex/R&D was $12.74 psf in the first quarter of 2017, up 0.4% for the period, up 1.8% from a year earlier, and well above the U.S. average of $9.40 psf. The local average effective rent was $10.90 psf, up 0.6% for the quarter and 2.1% year-over-year. VIEW INDUSTRIAL LISTINGS >
The 131.3-million-square-foot Boston general purpose, multi-tenant office market got off to a slow start in the first quarter of 2017 with negative net absorption; but investors didn’t seem to mind, and the dollar value of properties sold was the highest in a couple of years. The vacancy rate is 12.3% as of the first quarter of 2017, according to Reis, up 40 basis points during the quarter, up 20 from a year earlier. The average asking rent increased 0.9% to $41.77 psf, with the average effective rent up 0.8% to $34.83 psf. The year-over-year gains are a moderate 2.6% and 2.7%, respectively. VIEW OFFICE LISTINGS >
Boston’s 37.2-million-square-foot community-neighborhood shopping center market has a vacancy rate of just 6.4% in the first quarter of 2017, down 20 basis points from the prior quarter but unchanged year-over-year. In the first quarter, both the average asking rent and the average effective rent edged up just 0.1% to $23.74 psf and $21.51 psf. The year-over-year gains are 1.8% and 1.9%, respectively. VIEW RETAIL LISTINGS >

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Source: Data provided by Reis, inc.

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