Boston Multifamily Market

Like many major markets across the country, Boston’s multifamily market remains active, albeit at a much lower level than in previous years.

“From a sales perspective, institutional assets are certainly not trading. Transactional velocity is down significantly on the institutional side. In the private world — for assets between $3 and $10 million — transactional velocity is down but deals are definitely getting done,” says Robert Horvath, a senior sales associate with the Boston office of Marcus & Millichap.

Horvath believes this is trend will continue into the year, with fewer large institutional deals and more small, private client deals. One thing Boston has going for it right now is that the area’s many colleges and universities creates what Horvath calls a “student hedge,” which keeps demand up even in tough times. Smaller properties with fewer units move fast, especially in the core market and cities such as Brighton, Cambridge and Somerville. Horvath doesn’t see this going away anytime soon, either, especially with many schools facing a student housing shortage.

“I think [these types of properties] are going to do very well and be very strong in 2009 if you can get the assets to trade,” Horvath says.

Unfortunately, the frozen debt markets are having a huge effect on new construction starts, but the bright side is that there is already a large pipeline of projects already under construction. North of town, the Route 128 Corridor is seeing significant activity, which is being driven by good density and significant demand. In town, demand is centered on mixed-use.

“There’s a significant pipeline of new assets, a lot of it being the kind of mixed-use developments with a retail component, housing — both apartments and potential condos — and then some office. There’s a number of these large developments right now.”

The revitalized South Boston area is seeing a lot of these projects, including the Pier 4 and Fan Pier mixed-use developments. This new development, along with the city’s new convention center and accompanying retail, has created an ideal place for new development.

“South Boston and the Seaport area is going to have significant multifamily development that’s going to piggy-back off of a lot of these larger mixed-use projects,” Horvath says.

Vacancy rates are increasing, a trend that is expected to continue throughout the year. Core assets remain in demand, but projects located outside the Interstate 495 beltline are struggling, with some submarkets seeing vacancies as high as 9 percent. Rents are also expected to decrease here, but the same can’t be said for the urban core, which will see rents stabilize or show a small increase.

“I think transactional velocity will be fairly slow in the first two quarters of 2009. I think it will pick up in the third quarter and into 2010,” Horvath says.

— Coleman Wood


Archstone Avenir  ~  Canal Street in Boston  •  241 units  •  28,000 square feet of street level retail  •  2009

Northborough  ~  Routes 9 & 20 in Avalon  •  382 units  •  755,000 square feet of retail  •  Spring 2009  •  New         England Development and The Wilder Companies

Arborpoint at MeadowWalk  ~  Lynnfield  •  180 units  •  9-hole golf course, hotel and retail  •  2010  •  National Development

ArborPoint at Wellesley  ~  Wellesly  •  150 units  •  2010  •  National Development

Arborpoint at Reading  ~  Reading  •  202 units  •  2010  •  National Development

Westwood Station  ~  1.4 million square feet of retail  •  1.5 million square feet of office/lab space  •  1,000 apartment units  •  two hotels  •  New England Development

Station Landing  ~ Arborpoint at Station Landing  •  Currently 292 units built in 2005  •  Additional 168 units built for occupancy this past July •  Three-floor Boston Sports Club  •  Office and 8,800 square feet of retail/restaurant space  •  National Development

Pier 4  ~  Mixed Use Project  •  South Boston Waterfront  • retail/office/multifamily

Fan Pier  ~  Mixed Use Project  •  South Boston Waterfront  •  retail/office/multifamily

©2009 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.

Search Property Listings

Requirements for
News Sections

Market Highlights and Snapshots

Editorial Calendar

Today's Real Estate News