The US presidential election itself doesn’t clear the air of economic uncertainty. We have reasonable confidence that some or all of the fiscal cliff may be averted. The Euro crisis may, according to our Research team’s recent 2013 National Commercial Real Estate Outlook, get worse before it gets better. This will continue to drag on global confidence and the nation’s economy into next year.
Boston, however, stands out as an outperformer with the high tech and life sciences sectors leading the way, positioning the metro positively from a job recovery standpoint. The Boston metro area has fared extremely well, been successful attracting venture capital investments, and has evolved as the innovation economy that it is.
Consumer confidence is higher here than the national average, and spending continues to rise. That being said, like many US cities, we are recalibrating expectations in space use as it relates to job growth.
With the square footage per employee being challenged, and with the trend in increasing space efficiency, the relationship between job growth and space needs is changing. We remain vigilant and understand that although we are in a low supply market from a new construction standpoint, the space firms put back on the market equates to today’s ‘new supply.’
Fortunately, demand from smaller firms has kept up with the shedding of space by larger firms. The hope is for uncertainty to begin to dissipate by mid-2013, and for this trend to accelerate.