Boston Retail Market Report

Sparse development benefits market in time of uncertainty. Home to a high median household income, Boston will be somewhat insulated from economic headwinds this year. Nevertheless, elevated pricing will lead inflation-weary consumers to pare back their discretionary spending, impacting sales at local retailers. On the supply side, however, property fundamentals will be aided by a narrow pipeline, as Boston developers have become more deliberate with supply additions. For a second year, less than 1 million square feet will be finalized across the metro. This comes after builders completed an average of 1.3 million square feet annually during the prior five years. Fundamentals in Boston proper and close-in northern suburbs will be bolstered by this dearth of speculative supply. Availability in these locales was 2.1 percent and 1.7 percent as of late 2022, trailing the market average by at least 100 basis points. Developers may, however, increasingly target these zones moving forward, in response to these tight conditions.