Boston Retail Vacancy Rates Show No Change.
After the first quarter of 2013, Boston’s Retail market experienced minimal change in market conditions. The retail market saw its vacancy rate decrease from 4.4% at the end of 2012 to 4.3% at the conclusion of this most recent quarter. Vacant sublease space has trended down as well this quarter, finishing with 540,632 square feet, compared to 594,589 square feet of vacant space after the second quarter of 2012.
The first quarter of 2013 ended with an increase in retail net absorption. A positive 342,086 square feet was absorbed in the quarter, slightly up from 261,629 square feet at the end of 2012. Net absorption numbers for specific types of retail buildings ranged from negative to positive. For this previous quarter, shopping centers absorbed a positive 33,068 square feet, power centers experienced negative 79,046 square feet of absorption, and malls absorbed positive 4,210 square feet.
Sales activity and rental rates are two areas where the retail market has seen improvement. In the fourth quarter of 2012, 36 retail transactions closed, totaling 2,049,455 square feet with an average price per square foot of $172.26. These numbers are up from 2012’s third quarter, in which 20 transactions were made, totaling 1,308,243 square feet at an average price per square foot of $167.71. Quoted rental rates ended the first quarter of 2013 at $15.81 per square foot per year, compared to $15.61 for the fourth quarter of 2012.
Notable deliveries in the retail market for this quarter include 50 Pleasant St, a 29,400-square-foot facility and 62 Great Rd, a 27,962 square-foot building. Both of these properties were delivered in the first quarter of 2013. One of the largest transactions made during this quarter was the sale of 1 Faneuil Hall Square in Boston. This 44,287 square foot retail building sold for $40,000,000 on 4/6/2012.
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