6.9.2020
Boston Topples New York As Top Office Market
A recently released analysis by Hunneman Real Estate of data from Real Clear Analytics and CoStar shows that Boston-area office towers had total sales of $5.449B thus far 2020, compared with New York which had about $5.445B during the same period of time. “The life science and healthcare industries are the main factors driving investment into the Boston market, while New York City’s battle with the COVID-19 pandemic has hindered capital market activity in the country’s largest office market,” Hunneman Director of Research Tucker White wrote in a recent report. Additionally, while demand has faltered in NYC, there is a supply constraint in Boston for new properties that can accommodate a growing number of companies that are working on a COVID-19 vaccine.
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Apartment Values Stay Solid in Private Market Despite Falling Rents
Despite the COVID-19 pandemic and downward pressure on rental rates and occupancy rates, many investors are willing to pay pre-COVID 19 pricing for apartment buildings. For example, CIM recently purchased Southern Towers, a 2,346-apartment property including five 16-story towers in Alexandria, Virginia. The price was about $505 million, which is in the range of what market participants expected Southern Towers to go for pre-COVID 19, according to people familiar with the matter. CIM believes that demand for multifamily will remain strong and has underwritten a higher likelihood of a recession and its impact on the property. That being said, as the Fed lowered interest rates it lowered the cost of debt; thereby, increasing investor returns.
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