Boston set an all-time high in commercial sales pricing this year. According to Jessica Hughes, who spoke at yesterday’s NAIOP/SIOR Annual Market Forecast, cap rates are at historic lows for core Downtown office buildings. International capital is pouring in from investors like Norges and Oxford.
“I expect office sales to slow in 2015 due to a lack of supply,” said Jessica, “but oversees investors will continue to put their money to work in Greater Boston.”
“2015 will be different. A lot of the money coming in for development is going to be speculative, and much of it will come from China and other Asian markets. This is across sectors, everything from residential and condos to new spec office development.”
This year Boston emerged as a true global gateway city. There is a huge discount to buying here compared with markets like New York, London and Hong Kong. Jessica added that we also have the most balanced economy in the country.
“Boston has a premium lending environment. Although I don’t expect further cap rate compression, real estate value will continue to be driven by great fundamentals.
“Factor in all of the new development that’s underway,” she concluded, “and the atmosphere for investment here is supercharged.”