This excerpt was written by NAIOP CEO Tamara Small was originally published in the Boston Business Journal on January 27, 2023.
The year 2023 is expected to be a bumpy one for commercial real estate. The Financial Stability Oversight Council‘s Annual Report recently listed commercial real estate as one of its top market and credit concerns due to rising interest rates, borrowing costs, and uncertain economic conditions. In the Greater Boston market, the “flight to quality” trend where tenants are opting for new, highly amenitized Class A space will continue this year — particularly for lab and office tenants. Sublease space and vacancy rates, already at the highest point in 20 years in Boston, will continue to climb in both the downtown and suburbs.Read More
But there is a big miss in McKinsey’s report. It’s no secret that office space was hard hit by the pandemic — walking in downtown Boston for the past year has been more akin to walking in a ghost town. But McKinsey’s topline conclusion that the demand for office real estate may fall as workers spend more time in residential areas due to hybrid work, uses employer and employee data from before vaccines were available to everyone, and conflates a hybrid work-schedule with the need for less physical space.Read More
Last year was a pivotal time for commercial real estate across Massachusetts, and while 2021 is showing promise, there is a long way to go before we get back to pre-pandemic market stability and growth. In addition to the vaccine rollout there are a few critical components to the successful and resilient reopening of the economy.Read More
Today, Governor Baker announced new statewide restrictions designed to curb the recent spike in COVID-19 cases in Massachusetts. These restrictions will go into effect starting Saturday, December 26 and be in place for at least 2 weeks. It is the goal of the Baker-Polito Administration to keep these measures temporary, but extensions may be required based on public health data.Read More