Boston Retail Market Shows Little Change
ABG Commercial Advisors Q4 Boston Retail Report
The Boston retail market did not experience much change in market conditions throughout the previous year. The market ended the fourth quarter 2013 with an overall vacancy of rate of 4.3%, showing no change from the previous quarter. Vacancy rates stayed the same from the previous quarter at 4.3%. Net absorption did increase slightly while vacant sublease space and quoted rental rates each saw a marginal decrease.
Retail net absorption was strong in the fourth quarter 2013, with a positive 810,487 square feet absorbed, up from the previous quarters. While overall vacancy rate did not change from the third quarter, it did go down over the course of the year, from 4.5% in the first quarter 2013 to 4.3% in the current quarter.
The amount of vacant sublease space has still trended down over the past four quarters. Quoted asking rental rates have leveled out somewhat, decreasing to $16.63 per square foot from $17.93 per square foot at the end of third quarter 2013. However, rental rates have still increased since the beginning of the year, when they were $15.73 per square foot at the end of the first quarter 2013.
During the fourth quarter 2013, 11 buildings totaling 675,588 square feet were completed in the Boston retail market. Over the past four quarters, a total of 1,676,516 square feet of retail space has been built in Boston. Some of the notable 2013 deliveries include 427 Walnut Street, a 395,000-square-foot facility that delivered in the fourth quarter 2013.
In terms of sales activity, total retail center sales activity in 2013 was down compared to 2012. In the first nine months of 2013, the market saw 63 retail sales transactions with a total volume of $397,496,119. The price per square foot averaged $84.97. In the same nine months of 2012, the market posted 57 transactions with a total volume of $443,148,343, with an average price per square foot of $157.93.
One of the largest transactions from the last four quarters in the Boston market is the sale of 760 Fellsway in Medford, MA. This 145,228 square foot retail center sold for $42,500,000, or $292.64 per square foot, on 10/17/2013. (Costar)