From Travis D’Amato
Senior Vice President, Capital Markets
Everyone’s talking about the Boston apartment market.
Boston sales volume for multifamily product will easily reach record levels this year. The only question is by how much.
The biggest year ever was 2007 with approximately $1.7 billion in volume. Last year we saw $1.4 billion close for the second biggest year ever. Year-to-date 2015 has already hit $1.6 billion in closings. If you count deals both in the market and under agreement, it adds another $2.4 billion to that figure leading to a total volume that will likely exceed $4 billion in 2015.
Contributing to this volume is all of the new construction deals trading at a record pace and at record per unit sales prices. Class A properties are experiencing tremendous lease-up velocity while only offering one month of concessions on average.
Even with the increase in sales volume, there still isn’t enough supply to satisfy investor demand. Boston remains one of the top three target markets along with San Francisco and New York, for institutional investments in multifamily. Our demographics have never been stronger. In addition to increased demand, rising construction costs and limited site availability will keep housing production in check and help Boston avoid overbuilding.
See last week’s issue of The Real Reporter for additional information on our Multifamily and Debt team’s contribution to our Capital Markets team’s half-billion in year-to-date deals.