Boston’s retail market did not experience much change in the first quarter of 2018 and remains strong. There has been a lot of press around the impending doom of retail, but, in my opinion, that is over-hyped. The retail environment is constantly changing – clothing stores are seeing a higher percentage of sales online, but “experiential” retailers are expanding. Here are some highlights of Boston’s retail market:
Boston’s Retail Leasing Market
- Average Rent Rates Increased: +2.7% over Q4 2017, +9.44% over Q1 2017.
- Vacancy Rate Increased Slightly: 3.0%. Vacancy rate was 2.9% in second, third and fourth quarters of 2017.
- Negative Net Absorption: Retail net absorption in Boston in Q1 2018 was -297,204 square feet. This means that more retail space became available than was moved into. The past three quarters all had a positive absorption rates.
Boston’s Retail Sales Market
- Sale Volume Increased: Retail sales activity rose during Q4 2017 compared to Q3 2017.
- Sale Prices Increased: The average price per square foot in Q4 2017 was $203.81, compared to $145.74 in Q3 2017.
- One of the largest transactions in the past year was the sale of the retail block at 201 Newbury Street, which consisted of 24,712 square feet for $75 million, or $3,034.96 per square foot.