What’s happening with the retail real estate market in greater Boston, Massachusetts? In this video, Jeremy Cyrier explains Mid Q4 2019 retail property sales and rental rate information for Rockingham, Essex, and Middlesex counties covering north and west of Boston into southern New Hampshire.
Sales trends to watch in the Boston commercial real estate market: https://masscommercialproperties.com/boston-commercial-real-estate-market-sales-trends/
Get an industrial market update for greater Boston: https://www.youtube.com/watch?v=esCE1O_lR-8
Get an office market update for greater Boston: https://www.youtube.com/watch?v=uibdJpXXvAE&t=2s
Find out the top 5 questions to ask your commercial real estate broker: https://masscommercialproperties.com/top-five-questions-commercial-real-estate-broker/
So, how’s the retail market? I get that question quite a bit and it’s a great question. If you read the news, all you’re hearing about are big-box stores, department stores, and the Amazon effect.
But what’s interesting about retail, particularly in the market that we track, which is the 1 to $20 million market for Rockingham, Essex and Middlesex counties, is that this market isn’t necessarily following what you’re seeing in the news. In fact, what we’re seeing is continued appreciation. In fact, the average price per square foot for retail property, between 1 and 20 million, is currently trading at $221 a square foot. It’s continued to appreciate, as have rents, from quarter four 2010 to quarter four 2019. The average rents for retail space are $23.20 a square foot. That’s up 15.39% over the last nine years.
So, we’re continuing to see appreciation in retail and we’re continuing to see investors have appetite for retail, but what we are seeing is velocity slowing down a little bit. So, what I mean by that is that while prices are appreciating, the number of buildings that are trading by year are slowing a bit. In 2018, there were 59 more trades than there should be by the end of 2019. That’s based on the annualized information that we project, following the activity in the market.
The vacancy rates are at 2.8%. Very low. This is 137 million square foot market. There’s a lot of retail in the market. We are seeing a downtick in availability. So, what that means is that landlords aren’t anticipating space coming back. But we are seeing some rental depreciation, so rents are are turning a little bit.
The Glenn Mueller market cycle chart shows us at peak for retail in our greater Boston MSA, as you can see here. So, definitely seeing signs of continued health and exuberance in the market. How long it’ll go for, I don’t know, but we are seeing a slight cooling in volume.
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