Skip to Content.

Boston to Experience More Demand for Multi-Housing Buildings in 2015

Tuesday, March 17, 2015

Employment growth in Boston’s high-wage tech and health industries is creating demand for multi-housing buildings and apartments. Other sectors, such as business services and education and health services, having passed pre-recession employment levels raised demand for multi-housing buildings in Boston. Employment and Population Totals The added jobs have led to strong absorption, and the vacancy rate has remained around 4 percent. The high-wage jobs have increased demand for Class A product in the urban core.

Boston’s apartment market fundamentals finished 2014 better than 2013. Axiometrics noted, “Boston is gaining strength, along with the rest of the Northeast. The new construction is being absorbed, as new rental households are being formed. Continued tech-industry growth will do nothing but help the apartment market.

Boston Multi-Housing Development

A total of little over 7,300 units were delivered in Boston in 2014, and an additional 8,000 units will come to the market in 2015, showcasing growing demand for multi-housing buildings for sale. Close to half of the units delivered in 2015 will come to the Central City submarket.

Multi-Housing Building Occupancy and Absorption

Boston’s multi-housing buildings occupancy of 95.5 percent remained unchanged from 2013 to 2014 and is forecasted to remain above 95 percent in the future years. More than 7,200 units were absorbed in 2014, up from 2,400 units in 2013. During November 2014, due to Boston being densely populated and home to several universities, Class C led with an occupancy of 96.4 percent. Class A and B follow closely with 95.8 percent and 95.5 percent.

Boston Occupancy Boston Completions and Net Absorption

Rental Rates for Multi-Housing Buildings

New construction has increased effective rent. The effective rent growth finished 2014 at 3.8 percent and had an effective rent level of $2,081. Effective rent growth will moderate in 2015 but remain healthy and will peak in 2018 at 4.7 percent.

Class B saw the highest rent growth of 3.5 percent followed by Class C at 2.9 percent and Class A at 1.9 percent during the year-ending November 2014. Class A saw the least amount of growth due to new supply hitting the market during this time period.

Boston Rental RatesBoston Annual Rates Growth

Contact HFF Boston for more information regarding multi-housing properties on the market in this area.

Comments (0)
Post has no comments.
Post a Comment
Captcha Image

Search HFF Advisor

Recent Posts

By Topics


Back to top.