Thriving Industries and Suburban Inversion Drive Beantown Boom
"Boston’s real estate market, often overshadowed by the skyscrapers of New York and government-fueled growth in Washington, is seeing a boom in construction as developers financed with cheap debt seek to profit from a growing workforce of educated young adults and strength in the technology and life-sciences industries," reports Nadja Brandt. "The office-vacancy rate is among the lowest of major U.S. markets and tenants are occupying new space at almost triple the national average."
Brandt surveys the city's most prominent development projects, which include the $620 million redevelopment of the original Filene’s department store property and the $800 million headquarters for Vertex Pharmaceuticals Inc. -- "the nation’s largest privately funded office-construction project."
"Construction spending in Boston increased an estimated 37 percent in the year ended June 30 to $3.83 billion, the most since 2008, according to the mayor’s office. The market is hot enough that some developers are considering building offices without having landed anchor tenants," she adds.
“'You have a city that has biotech and other thriving industries, and some big-name financial services,' said John Garth, managing director at Pembrook Capital Management LLC, a New York-based real estate investor looking to finance apartment construction in Boston. 'It’s a huge draw for young people, and that creates lots of demand for rental apartments as well as new office space and other construction.'”