Marcus & Millichap

Boston Retail Investment Forecast

Outlook 2019

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Boston Retail Space Scarce for Tenants and Investors; Prices Push to New Peak

Boston retail space is among the most efficient in nation. The local employment market has recorded an influx in high-paying, white-collar jobs in core locations. Last year, the professional and business services sector accounted for approximately half of the new positions created in the market. Many of these new jobs are in densely populated communities that are flush with recently constructed apartments and mixed-used properties. Vacant space in these areas is attracting population-serving retailers attempting to capture a piece of the elevated wages and lifestyle enjoyed by well-compensated workers. Outside of core areas, space demand remains consistently strong. Only the Wilmington/Redding area entered the year with a vacancy rate north of 8 percent, and no other portion of the metro reported availability above 6 percent. Although construction will nearly double this year, deliveries are below the five-year average and pre-leasing is approaching 80 percent. Retail vacancy will remain sufficiently low to support healthy rent gains.

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