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Common Trends Affecting the Springfield MA Commercial Real Estate Market in 2017

Acquiring real estate market insight can be of great help when investing in commercial property, especially in Springfield MA. Every year, economists, historians, and real estate groups search for trends and statistics in real estate. The analyzed data becomes a driver that impact greatly on real estate business in Springfield. New developments in commercial real estate have been materializing rapidly. The following are the most recent reports in Springfield real estate business.

Vacancies are Falling

Absorption stayed stagnant in the second quarter of 2017. This means that it is maintaining the same trend as that of the few past years that had a slow Q2.The first half of the year ended at 10.7%, which marked a new low point for the current economic expansion. Rent growth continues to accelerate to about 9.2 percent for the past twelve months. The increased fundamentals and scarcity of high-quality products are powering growth in second-tier properties.

These current developments power the conditions that will continue to favor landlords in the near future. This is because there are less commercial properties that are being injected into the market, which increases demand over supply. Properties under development should not disrupt the fundamental picture unless they are used for future analysis. The overall economic growth looks positive. Tenants need quality products and landlords have to meet their needs. Moreover, general manufacturing, distribution, and warehousing are set to benefit.

Favorable Tides for Class A Assets

The tides are currently turning in favor of Class A assets. Although Class B vacancies fell, the overall property absorption in the Springfield downtown market was positive. In the first quarter, vacancies ended at 10.8%, which was less than the previous quarter by 0.1 percent but went up by 0.3 percentage points for the past year. While other submarkets displayed a negative marginal absorption during this quarter, the port and financial district have started the current quarter from a pure standpoint of the absorption.

The Springfield Market Evolved Significantly

The commercial real estate market in Springfield is rapidly evolving. In a place where development has been dominated by media, adverts, and technology, conventional real estate knowledge seems to have been forgotten. Class B outdid A, while the black bay lags behind the financial districts and the seaport. The high-rise space does not have the clout as it used to. Because of the most recent up and down in the trends, 2017 started in a positive way.

The Springfield lab and office market is getting softer. For instance, direct and total vacancies increased over the first quarter of 2017. This left more than a million of available sublease property, something that has not occurred for more than twelve years. All vacancies went up by 7.4 % at the beginning of the year. This means that they went up by 3 percent from the preceding quarter and a comparable amount of increase from the past year. It did not seem like the market would have gotten tighter than it was in quarter three of the year 2016, which left vacancies no option but to increase.

Significant reduction in Commercial Vacancies in the Final Quarter

The number of office vacancies in the city decreased. Net absorption rates have recently gone down by 11.5 million since the beginning of 2015. During the first quarter, vacancies ended at twelve percent, which made a fresh low paint for the current economic expansion. High technology manufacturing has remained to be the driver of the market today. New companies coming into the city have triggered the decrease in vacancies. While many industries are bleeding manufacturing operations, the working group of people is encouraging it since it lowers unemployment rate. Rent prices have gone up by 22 percent since 2010 and by 8% in the past one year alone. This ended the quarter with a new high mark. The most competitive and more advanced properties are leading the market. This is because improved essentials and the low amount of quality products are powering growth in the commercial real estate market.

Commercial Real Estate Market in Springfield Expected to Remain Steady

The tomorrow of real estate markets appears to be uncertain. Currently, there is optimism that the Springfield property market will remain steady, even though more improvements are still expected in the future. At the moment, commercial real estate remains stable and slow and is expected to remain so for a few more months. However, the long-term future of the business is not known due to various changes in the trends determining factors. Some of these factors include new companies investing in the region as well as considerations for the new tax reform, overhaul of financial regulatory, and investments in infrastructure. Researchers, investors, and experts are uncertain about the changes that will be brought by the proposed variations. In other words, prices have gone up as compared to the previous one year. These prices are expected to remain steady for the short-term future but are mostly expected to rise after a while. Property prices of commercial property in Springfield have currently reached their peak.

The 2017 Massachusetts real estate market can be categorized by increased investors, the number of transactions and fundamentals that relate to it. With the rate at which unemployment is decreasing all over the country, demand for different forms of housing like office spaces is increasing at an impressive rate. It is clear that the growth of the state of Massachusetts, particularly in Springfield can be considered stable. There are also threats of inflation in major states and business industries. Lending rates are expected to be low as compared to past standards, which include levered procurement of real estate properties. Trends that play important roles in Springfield commercial real estate market include global and political uncertainties, cap rate environment, foreign investments, low interests, the new supply of properties, and unstable energy markets.


Investing in real estate can be a beneficial business if you take into consideration updated information such as trends. This is mainly because the commercial real estate market is very hard to predict. It is also important to learn and understand the factors that affect the real estate trade in order to have informed investment decisions.