BOSTON—Residential rents in Boston remain strong despite uptick in supply, according to a multifamily report released by NAI Hunneman.
This year, demand drivers impressed as both population and employment trends remained positive throughout New England’s largest metro areas, according to NAI Hunneman’s Second Quarter Multifamily Report.
“Greater Boston outperformed with the metro’s population base surpassing 4.8 million. While the unemployment rate has ticked up in recent months, expansions in the education, tech, and life science industries, continue to drive the Boston metro area’s economy,” NAI Hunneman said on its website.
Steady job growth and continued migration toward urban and infill locations bode well for household formation in this market. Vacancies in the Boston Metro’s Class A+/A asset class declined to 4.3% in the second quarter while the Class A-/B+ and Class B/B- asset classes posted vacancy rates of 3.6% and 3.5%, respectively.
Some highlights from our report include:
- Asking rents continue to climb in Metro Boston; increasing by more than 30% over the last five years and reaching $2.39 per square foot in the second quarter.
- Boston remains a top destination for capital with continued interest from foreign and institutional players. However, peak pricing and uncertainty surrounding current federal legislation will likely continue to have an impact on the bid-ask spread among buyers and sellers; ultimately weighing on transaction volumes.
- While multifamily development is limited in the Springfield/ Worcester metro area, a handful of projects are currently underway in the market. 145 Front @ City Square (237 units) and The Lofts at City Place (51 units) represent the largest projects.