Greater Boston Commercial Real Estate Market Insights & Trends for Owners

In this video, Jeremy Cyrier from MANSARD, discusses the state of the commercial real estate market. Jeremy shares his experience of exploring the most viewed videos about commercial real estate on YouTube, only to find a common theme of doom and gloom. While there are challenges in the market, such as interest rate hikes and shifting work paradigms, it doesn’t mean the entire commercial real estate market is unhealthy. Jeremy emphasizes the importance of focusing on specific asset classes, markets, and cycles to gauge the market’s health accurately.

Jeremy highlights that the market exists within our own perceptions and encourages viewers to be mindful of the content they consume. He reminds us that the value of a property is subject to perception and that the market’s diversity offers opportunities for buyers and sellers alike. If you’re feeling uncertain about the market, MANSARD is here to help. Visit our website for a consultation and expert guidance on navigating your commercial real estate portfolio.

Subscribe to MANSARD’s channel for insightful market discussions and updates, with a focus on the greater Boston area. If you have questions or need assistance, our team is ready to provide answers and direct you to the right resources.

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Have you been searching for a Greater Boston Commercial Real Estate Market Report? We’re going to cover Rockingham, Essex, and Middlesex counties for retail, office, industrial, and flex properties. The big theme of this update is about a 20-minute video, that is going to be what I call the pause, and I will explain that to you as we get into the data. The key thing to keep an eye on is the average price per square foot for the trades that have happened year to date, in contrast to prior years. Watch for that in the video. If you like the video, give us a thumbs up or feel free to comment. We look forward to your reactions.

This is the first quarter 2023 update, and we’re going to cover Rockingham, Essex, and Middlesex counties, looking at properties in the retail office and industrial classifications, valued between 1 million to 100 million dollars. These are properties that have sold year to date, January 1st through the end of the first quarter in 2023.
Volume-wise, coming out of COVID, the 2021 year, you’ll see that 828 transactions represented a high watermark. In fact, if you look at that number of sales in relationship to the trend, going back to 2006, you’ll see that 2021 and 2022 were both outliers in terms of the number of transactions that typically happen in this market area.
This year, in 2023, we’ve had 122 sales occur. If we project that out, and what we do is we trend it and can annualize it, we’re seeing that the annualized number is going to be about 474 transactions in 2023. That’s if everything stays constant going forward for the next three quarters. It’s possible this number could rise or fall depending on a number of factors, but right now, we’re projecting to end the year around 474 transactions.
We’re on trend to deliver about half the number of sales that we saw in 2021, and we are trending to the mean or average of the number of sales that occurred between 2006 and 2022 of 454 transactions per year, we’re actually going into a deceleration in the market that’s returning us to the long-term average for the typical number of sales transactions in a given year.

What this means is that we’ve essentially entered what I want to call the pause in the market, and the pause originally started back in May, June of 2022 when contract originations started to decline, and we started to see fewer transactions occurring. Those numbers showed up in the October 2022 numbers, November, December, January. Now, we’re into January and February.

What I mean by the pause is that we’ve seen a separation in the sales data in the sense that high quality, high-value properties, for the most part, there are a few aberrations, a few outliers, but for the most part have departed the market and are not being traded. What we’re actually seeing traded right now are deals that may have been lingering. There may be some opportunity, deep value-add pricing with these deals. When I get to the average pricing per square foot, you’re going to see this data show up.
Transaction velocity-wise, what we’re seeing here is this deceleration coming out of ’21 and ’22 where we saw a sharp increase in transactions in ’21. In fact, that was a 44% positive change. That started to slow down a little bit in 2022. We dropped about 104 transactions from ’21 to ’22, mainly due to the Federal Reserve raising interest rates and investors starting to pull back out of the market to wait to see how far those interest rates were going to run. That’s continued into 2023, where we’re seeing an ongoing deceleration in sales volume. The volume or number of trades year over year is down about a third. Down about 33%.
Just to benchmark us in the 10-year treasury world, the 10-year treasury year to date is averaging about 3.45, 3.5 percent, right around there. We saw the largest run-up in the 10-year treasury in 2022, but we’re now seeing a deceleration in the federal interest rate increases and in the 10-year treasury pricing….

Thanks for watching the video. If you like it, you can hit that notification bell, give us a thumbs up and subscribe. We look forward to seeing you in the next video. Thanks.

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INDEX TIME STAMP:
Market Overview 0.01-14:01
Retail: 14:01
Industrial 16:23
Office: 17:09

What are the six signs to watch for when it’s time to list commercial property?

“I have negative cash flow and I need to sell.”

“I sold, closed, or moved my business and need to my commercial real estate for sale.”
“I’m tired of managing the property.”

“I’ve grown the property to what I think to be its full potential and I’m ready to list my commercial property.”

“Investors are pressing me for their returns.”

“I want to list commercial property and leaseback to generate cash to grow my business.”

Process:
1. Discovery
2. Evaluation
3. Exposure
4. Closing

A lot of times when you’re thinking of listing commercial property, it’s easy to want to try to time the market and figure out is this the best time to go to market? And frankly, I’ve been doing this for over 20 years, and involved in over a thousand transactions, and I’ll tell you that it’s only during market peaks that we see property owners who want to list commercial property coming to market and telling us they’re selling because they’ve grown the property to the full potential. It’s not going to increase in value anymore from their perspective, and that’s the number one reason why they’re selling. So that’s predominantly one of the reasons why you would list commercial property, but unfortunately, peak cycles happen only once every about 10 years, so there have to be five other signs that you would identify for when it’s the right time to sell.

Thanks for watching the video. If you like it, you can hit that notification bell, give us a thumbs up and subscribe. We look forward to seeing you in the next video. Thanks.

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6 Reasons Why People Are Selling in Today’s Market: https://masscommercialproperties.com/…

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What are the four most important categories for you to consider when you’re evaluating investment property, particularly if you’re getting ready to sell your property and you want to understand what the value is in today’s market? In this video Jeremy Cyrier, CCIM, President & Commercial Real Estate Advisor will go over crucial information related to these 4 Keys to evaluating investment property.

Thanks for watching the video. If you like it, you can hit that notification bell, give us a thumbs up and subscribe. We look forward to seeing you in the next video. Thanks.

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6 Reasons Why People Are Selling in Today’s Market: https://masscommercialproperties.com/six-signs-its-time-to-sell

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If you’ve recently sold your company and the buyer of your business has come back to you and asked you about buying your property, then this video is for you. In this video, Jeremy Cyrier provides insight on what to consider when your tenant wants to buy your property.

If you’re interested in learning more about how to do evaluation when you’re in this specific situation, feel free to reach out to us. You can request a consultation on our website, at mansardcre.com, or you can call our office and we’ll be happy to have a conversation with you to talk to you about how we help a business owner such as yourself, figure out how to best approach a situation where you have a tenant who owns your prior company that wants to buy your real estate.

Thanks for watching the video. If you like it, you can hit that notification bell, give us a thumbs up and subscribe. We look forward to seeing you in the next video. Thanks.

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Subscribe to MANSARD’s Youtube Channel: https://www.youtube.com/channel/UCGn7GBJqbP6YNqJmw0Lqbiw?sub_confirmation=1
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6 Reasons Why People Are Selling in Today’s Market:
https://masscommercialproperties.com/six-signs-its-time-to-sell
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Connect with MANSARD on LinkedIn:
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292 Lowell Street (Including 39 Winter Street) is a multi-tenant, dual building 6,651 SF auto service retail property in Lawrence, MA. The property consists of 8 drive-in bays, an office and customer waiting area with two restrooms, and an additional 900 SF of mezzanine storage. 292 Lowell Street is fully sprinklered and features (4) 10′ x 10′ Doors and (2) 12′ x 10′ doors. 39 Winter St has (2) 10′ x 10′ Doors and is not sprinklered. The property features 2005 updates, including new garage doors, an entrance door, windows, a rubber roof, natural gas heating system, ceiling lighting, and an office with 1 ADA accessible restroom, along with gas, water, and sewer connections to the

Want to learn more? https://buff.ly/3PIcnyq

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Everyone wants to sell a commercial property when the accepted offer equals the closing price.

Renegotiations are frustrating, time-consuming, and expensive and can damage your profits and reputation if the sale of your commercial property fails to close. Most sellers want to avoid investing to pull together the 5 best things to do before selling their commercial property.

Who wants to invest money into selling a commercial property when you are curious if a buyer will pay you the right price?

Unfortunately, what’s more expensive and disappointing is when the excitement of finding a buyer and forming an agreement results in a renegotiation. Buyers will often agree to a price to put the property under agreement, followed by extensive and expensive due diligence. The results often change the buyer’s mind on the offer price and lead to frustrating renegotiations.

** The 5 Best Things To Do Before Selling Your Commercial Property ** Property Condition Assessment
Environmental Reports
Title Survey
Rent Roll
Prior 3 years of Operating Expenses

When you complete these items before offering your commercial property for sale, you give the buyer a clearer picture of the physical and financial health of the property.

You narrow the bid-ask gap because the buyer’s risk is mitigated with this valuable information. Moreover, you build trust with the buyer, resulting in higher offer prices and a smoother sale.

Are you looking to sell your commercial real estate?

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In this video Jeremy Cyrier from MANSARD will be giving an update on the year-end numbers for 2022 for office sales in the Greater Boston and Southern NH markets.

MANSARD has pulled together all of the trades that happened in Rockingham, Essex, and Middlesex Counties, valued between $1M and $100M in 2022. In this video Jeremy is going to show you some data, charts, and market cycle trend information. We hope you enjoy it, and if you do, please give us a thumbs up, subscribe to our channel.

“Polling Glen Mueller’s market cycle monitor, his forecast for Boston area, industrial again, a peak year maintaining strong pricing and low vacancy rates and strong rent the office market, our last asset class we’ll look at, pricing here, maintaining actually pretty strong pricing. This is predominantly suburban office because we’re pulling from Rockingham, Essex, and Middlesex counties, but we are seeing this market start to show signs of softening just in terms of velocity. And I’m not sure if this is a result of buyer pullback from the market. The pricing certainly doesn’t seem to indicate that, or it’s a reluctance of sellers to enter the market because they’re not confident in buyer appetite for office products. Regardless, we are seeing here in 2022, a decline in transaction volume and office buildings are still trading, but we are seeing a downward trend there in interest. And Mueller has charted office going into the third quarter of 2023 sliding down. He had in the prior video I did, you’ll see the second quarter estimate for 2023. He had office at the five positions, which was late stage recovery. He has since moved that down a notch to the four positions, which is showing signs of ongoing softness in the Boston office.”

Are you looking to sell your commercial real estate?

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In this video Jeremy Cyrier from MANSARD will be giving an update on the year-end numbers for 2022 for industrial sales in the greater Boston area.

MANSARD has pulled together all of the trades that happened in Rockingham, Essex, and Middlesex Counties, valued between $1M and $100M in 2022. In this video Jeremy is going to show you some data, charts, and market cycle trend information. We hope you enjoy it, and if you do, please give us a thumbs up, subscribe to our channel.

“The industrial market, we saw quite a bit of transaction activity in 2022, again, not as much as 2021, but in relationship to prior years 2022, looked at a little bit more like a 2020, probably trending downwards somewhat to more of the 2018, 2019 levels in the market, but anticipating some slight rent adjustments in that market. But the demand in the market continues to be strong, at least for what we’re tracking between $1M and $100M, and we’re expecting that market to maintain and hold its pricing pretty well. As you can see here, the average price per square foot for industrial heading here, just above that $180 square foot market for those three counties that we pulled the data from.”

Are you looking to sell your commercial real estate?

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Get Your Selling & Capital Gains Tax Guide: https://masscommercialproperties.com/…

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In this video Jeremy Cyrier from MANSARD will be giving an update on the year-end numbers for 2022 for retail investment sales in the Greater Boston and southern NH markets.

MANSARD has pulled together all of the trades that happened in Rockingham, Essex, and Middlesex Counties, valued between $1M and $100M in 2022. In this video Jeremy is going to show you some data, charts, and market cycle trend information. We hope you enjoy it, and if you do, please give us a thumbs up, subscribe to our channel.

“So the result is a corresponding competitive situation where the pricing is being bid the retail market, let’s take a look at the volume. 2022 is a busy year for retail. They’re about 350 trades last year. Quite a bit of activity. It’s interesting to see this volume going through the market, but also seeing the average price per square foot showing signs of weakening. So we do see that the market for retail is strong in Boston. I think we’ll continue to see ongoing interest in that market this year. And with the market being forecast to maintain at peak level through the year, I think it’s going to be a pretty good year for retail.”

Are you looking to sell your commercial real estate?

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Subscribe to MANSARD’s Youtube Channel: https://www.youtube.com/channel/UCGn7…

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Check Out Our Latest Video: https://www.tubebuddy.com/quicknav/la…

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Get Your Selling & Capital Gains Tax Guide: https://masscommercialproperties.com/…

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Want to know how to calculate commercial real estate value? https://masscommercialproperties.com/…

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Connect with MANSARD on LinkedIn: https://www.linkedin.com/in/jeremycyr…

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