Boston is experiencing an unprecedented multifamily development boom. At a recent NAIOP program entitled “The Residential Rise,” a panel of experts including Travis D’Amato of JLL’s Capital Markets group focused on this growth in the apartment and condo markets.Travis answered two key questions: Will the current surge in supply be absorbed? And who can afford the new luxury rental units at these record-setting prices?
“Boston has long been under served in the luxury apartment space,” he said. “It was only a matter of time before developers capitalized on the lack of Class A apartments in downtown Boston.
“With vacancy rates at all-time lows,” he continued, “there is plenty of room to add these properties to the supply. Absorption will be there.”
Who can afford today’s apartments with some rents topping $3,000 a month? Travis said that most of these units are rented to multiple tenants. “Young couples with dual incomes and empty nesters are finding the lifestyle very appealing. Gross rents may be high, but this is offset by the convenience of amenities and low maintenance.” Travis noted that the units are getting smaller on a square foot basis. However, they are also becoming much more efficient, and common area spaces like roof tops, cafes and private function rooms continue to improve.
The panel consisted of Travis, Leslie Cohen of Samuels & Associates, The Collaborative Companies’ Sue Hawkes, and Steve Faber of Related Beal. When the conversation turned to the condo market, everyone agreed that there simply isn’t enough supply in Boston. According to Travis, the problem facing developers is that the market and timing of the sellout must be precise in order to generate necessary returns.
All speakers agreed on one thing: Boston is clearly one of the top five residential markets in the country. Whether it’s apartments or condos, today’s influx of housing development will keep a young, educated workforce right here in Boston for years to come.