Our mobile site is optimized for smaller screens.

TRY IT NO THANKS
Advanced Search

      Eric Shabshelowitz

      Update on Boston's Multi-Family Market - 2015 Year-End

      What area of Boston is best to invest in?  That is a question we get asked a lot.  We are still compiling and analyzing data for our annual investment property report, which provides a comprehensive multi-family analysis.  If you would like to receive that report once it is available, please email Eric Shabshelowitz, our VP of Commercial RE.  In the meantime, here are some initial observations:

      Multi-family prices in Boston have gone up substantially in the past 4 years. In the chart below, the low in April 2012 was $131 and the high in September 2015 was $259. Put another way, the average sale price per square foot in Boston has essentially DOUBLED in the past 48 months.
       

      Boston Multi-Family Sale Price per Square Foot (over last 4 years)

      The inventory chart below is also interesting. It shows that total multi-family inventory in Boston has not drastically changed in the past 4 years. While some areas (such as the Back Bay and the Fenway) have seen very few purchase opportunities, inventory in other neighborhoods has clearly risen. This will be discussed in our annual investment property report.
       

      Boston Multi-Family Inventory (over last 4 years)

      Contact Eric Shabshelowitz, our Vice President of Commercial Real Estate, if you have questions about Boston's multi-family market.
       

      Update on Boston's Condo Market - Year-End 2015

      Boston condominiums had another strong year in 2015. In the Back Bay, condo sales are averaging over $1,100 per square foot (yes, that's the AVERAGE). Beacon Hill and the South End have also seen prices rise.

      I think the biggest story of the year though is the Seaport District. In 2015, the Listing Information Network, Inc. (LINK) recorded 184 condo sales in the Seaport District at an average of $1,107.66 per square foot. By comparison, in 2014, there were 83 sales at $610.37 per square foot. That's an increase in sales volume of 122% and a price increase of 81%. Quite a year-over-year jump!

      With a number of luxury condo developments underway and businesses flocking to the Seaport (including the recent announcement that GE is planning to relocate its headquarters there), this trend is likely to continue. One area to watch is South Boston. Connected directly to the Seaport District, South Boston condos averaged $550 per square foot in 2015 and I think a number of the employees filling these new Seaport District jobs will be looking at South Boston condos as attractive alternatives to the units being built in the Seaport District.

      Below are some charts compiled by LINK with additional data on Boston's condo market in 2015:

       

       

      If you have any questions about Boston's condo market, don't hesitate to contact us!

      Comments

      1. No comments. Be the first to comment.

      West Roxbury Market Snapshot

      West Roxbury is turning into one of Boston's most active neighborhoods. Our Vice President of Commercial Real Estate, Eric Shabshelowitz, has personally been active there and was the #1 agent for multi-families in 2015 based on MLS.

      Here's a quick snapshot showing why West Roxbury is so popular:

      Multi-family prices have trended upwards over the past 5 years (above chart shows price per square foot since January 2011). The average sale price per SF in 2011 was $162. In 2015, West Roxbury multi-family sales were at $239/SF (a 47.5% increase from 2011).

      One of the drivers behind this increase is rent rates. The chart below shows average rents over the past 5 years. While not a drastic increase, the rents are progressing upwards. With rents in downtown Boston continuing to rise, this trend in West Roxbury should continue. The Days on Market chart, which is also below, shows that demand for West Roxbury apartments is growing (dropping from 95 DOM in 2011 to under 60 DOM now).

      If you have questions about West Roxbury, or investing in any other emerging Boston neighborhood, contact Eric Shabshelowitz.

       

      Q3 2015 Boston Retail Market Update

      Boston's retail market also remained strong in Q3 2015. Vacancy was down to 3.7% at the end of the quarter, compared with 3.9% in Q4 2014. Asking rent rates were also up - at $17.83/SF, up 5.38% from four quarters earlier. (Remember, those averages are across the greater Boston area - in Q3 2015, average quoted rent rates were $90.80/SF in the Back Bay and $110/SF in the Midtown/Downtown Crossing area).

      As the chart above shows, there is not a great deal of new construction retail space scheduled to be delivered in the next year - and much of what is, has already been committed to tenants.

      Sale prices have trended generally up. The chart below is a little deceiving in the sense that it covers so many different areas. However, I wanted to share it because it shows how strong 2015 started for Boston retail (data for the 2nd half of 2015 will be out in the coming weeks).

      Contact Eric Shabshelowitz, our Vice President of Commercial Real Estate, if you have any questions about or need help with Boston retail space.

       

       

      Comments

      1. No comments. Be the first to comment.

      Q3 2015 Boston Office Market Update

      Boston's office market remained strong in Q3 2015. Overall vacancy in the Boston area decreased to 9.1%, down from 9.2% at the end of Q2 2015 and 9.3% at the end of Q4 2014. Vacancy in Boston's central business district (CBD) was down to 7.6%, compare that with Q4 2014 when vacancy was at 8.3%. Interestingly, the vacancy rate for Class A properties is at 9.9% vs. only 5.2% for Class C properties. Rents are also up - in both Boston's CBD and the suburban markets.

       

      There has been a lot of press about the construction boom in Boston. In the first chart above, showing scheduled deliveries of new construction office space, note that most of it has already been leased. One common question is whether it is just companies moving out of old space into new and so it will create vacancy in their old building. However, that has not yet been the case - more office space continues to get leased than sits on the market (net absorption for Q3 2015 was positive 1,152,407 SF).

      Investment interest in Boston office property also remains strong. Cap rates continue to stay below national averages. Investors are also dominating the market, as only 7% of Boston's office space is owner-occupied.

      Contact Eric Shabshelowitz, our Vice President of Commercial Real Estate, if you have any questions about or need help with Boston office space.

      Comments

      1. No comments. Be the first to comment.

      Ten Ways to Increase the Value of Your Investment Property

      1. Set a Budget
      Setting a budget and managing expenses is very important when trying to make a profit off of an income property. Budget for future capital improvements - heating systems, hot water tanks, the roof and other big ticket items.

      2. Raise the Rents
      Raising rents can have a huge impact on your property's value. A higher rent roll means increased annual income, which boosts the value of the property. As leases expire, ask a professional to price the units.

      3. Give the Property a Makeover
      Whether fully renovating the kitchens and bathrooms or simply adding a fresh coat of paint, sprucing up your property will help increase demand from tenants. Higher demand means higher rents

      4. Change the Property's Use
      The way a property is currently used may not be the most valuable use for the property. As an example, in the Boston area, the residential market is incredibly strong. Converting a commercial/industrial building may allow you to substantially increase the property's rent roll. Check what local zoning allows.

      5. Upgrade Fixtures and Appliances
      Replacing old light fixtures and swapping old appliances with modern ones can be great selling points. Adding washers and dryers to the building are also a plus and can be an additional source of revenue if they are coin-operated.

      6. Lower your Taxes
      If your property includes retail or office space, your commercial tenants should be paying their fair share of real estate taxes. Additionally, and while it is uncommon right now in the Boston market, if you buy a property for less than the tax assessed value, file for a tax abatement.

      7. Separate Utilities
      Depending on the system, a building's heating expenses can be one of the largest expenses for a landlord. If they are not already, consider ways to separate out utilities so that tenants pay those costs directly.

      8. Renegotiate the Leases
      Renegotiating a lease gives the landlord the opportunity to raise rents and pass through expenses, but also to encourage improvements to the property. In commercial leases, for instance, the landlord may give free rent and construction allowances so that the tenant can make improvements to the space, including redoing the façade of the building, updating signage, replacing carpet and repainting. The tenant should pay a higher rent in return for those concessions, and your property will be improved - it is a win-win.

      9. Hire a Professional Property Manager
      A professional property manager can provide a number of valuable services to landlords, including handling maintenance issues and emergencies promptly, responding to tenant issues, negotiating better pricing from vendors and contractors and paying bills in a timely manner.

      10. Divide the Building
      In very general terms, the smaller the unit, the higher the rent on a dollar per square foot basis. Reconfiguring the property to increase the number of units can translate into a higher rent roll. Check local zoning.

      For a free consultation on how to increase the value of your investment property, eric@cabotandcompany.com.

      How has the Weather Impacted the Spring Market?

      Sure, offices and schools have had a number of snow days. But how has the weather impacted the real estate market?

      As you might expect, inventory is down... way down. The charts below are for residential condos, but we have seen a similar trend through all property categories.

      Downtown Boston Condo Inventory (Past 3 Years)

      Downtown Boston Condo Inventory (Past 18 Months)

      Boston's Spring market generally starts to pick up by late January/early February. Due to the storms, inventory is much lower than normal.

       

      Cambridge Condo Inventory (Past 3 Years)

      Cambridge's inventory chart shows a similar trend. 


      Most would-be sellers are waiting for a break in the weather. In a few weeks, once the temperatures start to rise and the snow banks clear, we'll likely see a good stream of properties come on the market. If you're planning to buy this Spring, now is a good time to get geared up and ready for hunting.

       

      Comments

      1. Jay on

        Cousin Gloria So GRATEFUL !!! Lil E Man has MANY Guardian Angels watching him. As does his Mommy & Daddy! *Hugs to All* Love ya MichelleP.S. Also, thank you for your vosutlenriem. An ah let those lights shine Bright, ESP tonight.