Much has been said about the current economic expansion our nation is experiencing. In fact, according to AEW’s Director of Research Michael Acton, who spoke this morning at our Capital Markets breakfast event, this is going to be the nation’s longest expansion once it’s done.
Although economists have been saying for the past four years this cycle would end in two years, it continues to live on. As JLL’s own Capital Markets Managing Director Frank Petz noted, we can’t look at this cycle as ‘what inning are we in?’ With financials and equity still rising, and capital increasingly flowing into Value Add investments, this cycle is proving durable even as it moves into a more mature phase.
So what is the forecast for Boston? Summed up best by Frank, the Boston story is incredible. Since the recession Boston has added over 325,000 jobs and employment has remained beyond historical peaks since 2013. Not surprisingly, Boston is seventh for total technology employment in the U.S., and its status as the number one life sciences market in the nation further fuels the incredible job creation occurring in the city.
Relative to other markets, though, a serious supply restraint does exist in Boston. Not only is 85% of the three and a half million square feet of inventory under development already preleased, but Boston also simply isn’t building as much compared to other cities.
With economists agreeing more and more that some form of a recession will come by 2020, what will the impact on Boston be? Luckily, probably not that much. As Bentall Kennedy’s Head of Strategy and Research Douglas Poutasse added, Boston is reasonably well positioned if a recession does indeed occur. The city’s powerful life science cluster, coupled with its high concentration of educated talent, makes it relatively solvent. As Douglas concluded, the future of the world is where innovation is occurring and that place is Boston.
Feel free to contact Frank with any questions you may have.