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Boston Area Commercial Real Estate Market to Watch: Multi-family Housing

Boston has been labeled one of the seven smartest U.S. cities. This convenient and accommodating smart technology can be found from the civil infrastructure to sky scrapers. Smart technology is wide-spread because it accommodates fundamental important factors like health and safety, and it adds convenience—you can find Wi-Fi nearly everywhere.

Also consider the Boston area economy: it’s booming and there is an influx of high-wage jobs from IT to healthcare.

The smart technology and inviting economy are drawing-in millennials to the area. In general, millennials prefer conveniences such as accessible transit, walkability, and diversity. This has created demand for multi-family housing in mixed-use commercial real estate developments.

The city’s advanced technology and strong economy increase productivity which boosts performance in real estate investment.

The demand for multi-family housing in mixed-use developments applies to the whole Boston area, not just the city.

Strong Commercial Real Estate Investing Opportunity in 2017: Multifamily Housing in the South Shore.

In 2017, the South Shore submarket has seen emerging trends in the multi-family housing market.

People want the amenities that multi-family housing mixed-use developments offer in the suburbs too. Traditional suburban develop is changing to accommodate the demand for amenities, and the South Shore is seeing this first hand.

In commercial real estate, occupancy metrics matter. Current capitalization rates will show that the multi-family housing asset performance is strong in Boston’s South Shore submarket.

As of 2016, the South Shore rental vacancy rate was a mere 4.7-percent and trends show it’s getting lower. This low vacancy rate holds, even though the Boston area rental market is the third most expensive in the U.S. Multi-family housing mixed-use developments are performing particularly strong as tenants pay higher rent when units are in close-proximity to amenities and conveniences—like transit.

The multi-family housing demand continues to rise: The 2016 to 2019 forecast period shows the South Shore submarket with a demand for 3.65K new rental units and 5.95K new sales units.

The smart city technology, strong economy, and influx of jobs seem to be supporting these trends and boosting the commercial real estate market in the area.

South Shore Housing Demand on the Rise

The commercial real estate investment potential in the South Shore submarket continues to grow. The South Shore Chamber of Commerce addressed the demand for the specific type of housing millennials are looking for: affordable with amenities. They stated that fulfilling the demand for this housing in the South Shore will support the South Shore’s ability to be a strong economic competitor.

The South Shore’s 2017 housing report provides projections for the next 13 years. In the next 13 years, it’s anticipated that 44K new dwellings or units will need to be delivered.

Forman urged that the South Shore needs to think about what they are building and understand that mixed-use, all-inclusive, multi-tenant commercial developments are the best fit for the area’s needs.

To avoid momentous housing shortages in the South Shore area, the Chamber of Commerce is advising the development of condos, townhouses and apartments that are compact and walkable, and boast conveniences like transit and retail.

This need for development of multi-use properties and walkable neighborhoods means that strong commercial real estate investment potential exists in South Shore submarket.

Invest in Multifamily Commercial Real Estate in Boston’s South Shore Submarket

With towns and cities transitioning to a less-traditional and more all-inclusive, mixed-use developments, there are many exciting commercial real estate investing opportunities for you.

The significant projected need for multi-family housing can be owed to the smart city technology, strong economy, and influx of jobs in the area. This results in productive and strong asset performance, and optimism in investment sales are holding steady or improving.

The Boston area has topped the list for overall real estate investment prospects in the Northeast region. Capitalize on the current multi-family commercial real estate investment opportunities in the South Shore submarket.