By Trey Agnew, NAI Hunneman Executive Vice President
When it comes to buying and selling properties, there are always several factors to track. The basic economics of supply and demand are key, of course, but the reasons why a neighborhood or type of building suddenly becomes ultra-popular are nuanced. With new developments, surging industries and other elements at work, there’s a lot to pay attention to.
Here are three trends I’m keeping an eye on:
1. Multifamily continues to be hot.
There has continued to be a high-level of pressure on the existing multifamily market and it’s showing no signs of slowing down. In addition to new large-scale multifamily that is under construction, what we’re seeing the most of right now are conversions from industrial properties into multifamily. This is particularly popular in former mill towns and urban up-and-coming cities such as Somerville. For instance, a former 117,000 SF freezer building at 9 Medford Street in Somerville is under contract to be repurposed into an apartment complex with more than 100 units and 5,000 SF of artists’ space. That area of Somerville is particularly appealing to developers due to its proximity to Kendall Square – it’s less than a half mile. Being able to walk to work is a huge convenience for high-tech/life science workers, so it’s likely that Somerville will continue to see a multifamily boom.
2. Supply and distribution companies are growing.
There has been a huge surge in demand by supply and distribution companies for industrial space closer to Boston, especially in areas like Wilmington and Woburn. The reasons for this are economic. Fuel is increasingly expensive and the less distance large vehicles have to travel, the better. For transportation companies, vehicle space and yard space, however, is highly limited. A hospital fleet or UPS and the like require a special garage license, meaning even fewer opportunities in an already tight market. It’s the essence of the supply and demand equation.
3. A casino in either Everett or East Boston will be a game changer.
The tectonic shift that will occur in real estate if a casino license is awarded to East Boston or Everett cannot be overestimated. But that’s not everything that area has going for it, given the proximity to Logan Airport. Developers are taking notice. We’re working with Wonderland Realty LLC, who recently put a major transit-oriented development consisting of a proposed 196-room hotel with a 175-car parking garage at 1290 North Shore Road in Revere on the market. With a casino in the East Boston area likely, we’ll continue to see more and more of these kinds of deals, bringing new life and economic activity to the area.