Boston, MA Economic Overview
Read about: Boston, MA Commercial Real Estate Market | Boston, MA Commercial Inventory Breakdown | Employment in Boston, MA | Education in Boston, MA | Commuting Time in Boston, MA
The city of Boston is the capital of Massachusetts and is located in the eastern part of the state, with direct access to the Atlantic Ocean. Boston proper has a population of over 670,000. Add to this the population of the Greater Boston MSA and the total is nearly 5 million residents, making Greater Boston the 10th-largest MSA in the U.S. As one of the oldest cities in the United States, the region has developed an amazing depth in business growth and economic diversity, making the Boston commercial real estate market one of the most attractive in the world.
The Greater Boston metropolitan business area has ties to all parts of the globe and is counted among the top 30 economically powerful regions in the world. With an annual gross metropolitan product of over $363 billion, it is the 12th-largest economy in the world and the sixth-largest in the U.S. The top economic segments in Boston include professional and business services, trade and transportation, financial services, and manufacturing. Among the top four are educational and health services, which, in turn, attract a massive amount of venture capital and high-tech industry to the Greater Boston area.
Boston, MA Commercial Real Estate Market
As the economic hub of New England, Boston attracts a highly educated work force, along with business and commercial real estate investment from around the world. Healthcare and education, finance, professional and business services, and trade and transportation collectively account for nearly 60% of Boston's economy.
The Boston office market encompasses over 210 million square feet, with the highest concentration of space in the Back Bay, Financial District, Seaport and Cambridge submarkets, as well as the industrial and high-tech business corridors of Routes 128 & 495. Millions of square feet of additional office space are in the planning stages or under development, with demand driven by financial, business, legal service and high-tech tenants.
With nearly as much retail space in Boston as there is office space, demand for retail continues to be extremely strong, registering vacancy rates of just over 3%, positive net absorption, increasing rental rates and an additional 2.7 million square feet currently in the pipeline. Much of the Boston retail market is focused on high-end product, with the submarkets of Back Bay, Framingham/Natick, Burlington/Woburn and Route 1 South currently seeing the most interest from both tenants and investors.The Greater Boston industrial market includes over 148 million square feet of space that is most concentrated along Routes 495 North & South and Route 128 South. Vacancies, net absorption and rents are all on the rise, with much of the demand for industrial space in Boston being driven by the high-tech manufacturing industry. In 2016, rental rates for industrial space in the Greater Boston region rose by nearly 8%. High land values and strict environmental controls will likely result in an increasingly tighter market in future years, presenting a strong opportunity for industrial investment in Boston.
Boston, MA Office Sales Volume
Data provided by Yardi Matrix, for properties larger than 50K SF, which sold at over $5M.
Boston, MA Office Transactions
Data provided by Yardi Matrix, for properties larger than 50K SF, which sold at over $5M.
Boston, MA Commercial Inventory Breakdown
Total: 95,715,389 SF
By square footage range:
- 50k to 100k SF: 6,347,694 SF / 6.63% of total office
- 100k to 500k SF: 36,649,041 SF / 38.29% of total office
- 500k to 1M SF: 32,120,986 SF / 33.56% of total office
- > 1M SF: 20,597,668 SF / 21.52% of total office
- Class A+: 19,521,031 SF / 20.39% of total office
- Class A: 41,666,183 SF / 43.53% of total office
- Class B: 21,117,477 SF / 22.06% of total office
- Class C: 75,800 SF / 0.08% of total office
Employment in Boston, MA
In addition to contributing over $4.8 billion to the economy annually, Boston's colleges and universities also contribute by attracting venture capital and high-technology businesses. Tourism also plays a major role, with 21 million national and international visitors adding over $8 billion to the economy every year. Financial service businesses such as Fidelity Investments, Santander Bank and State Street Corporation call Boston home.
In addition to high-tech, education, business and professional services, Boston has an increasing number of printing, publishing and manufacturing business headquarters such as Pearson PLC, Beacon Press, Houghton Mifflin Harcourt, as well as Converse, New Balance and Reebok.
The largest employers in Greater Boston include Partners HealthCare, the University of Massachusetts, Harvard University, Stop & Shop supermarkets, Steward Health Care System, Massachusetts General Hospital, Comcast, VA Boston Healthcare System, Hebrew SeniorLife and Tufts Health Plan. Top biotech and life sciences employers include Biogen Idec and Genzyme, and major financial services employers include John Hancock, Liberty Mutual, Arbella Mutual Insurance, Wellington Management, Bank of America and Brown Brothers Harriman.
Greater Boston's diverse, growing economy and educated workforce continue to attract both national and global institutional investors and will drive the demand for retail, office and industrial space in Boston for years to come.
Education in Boston, MA
When discussing higher education in Boston it's hard to know where to begin. Three of the most renowned universities in the world - Harvard, MIT and Tufts, are located in Greater Boston. The real estate submarket of Cambridge is nicknamed 'The Brainpower Triangle' and has seven of the highest-rated research activity universities, as classified by Carnegie, with the highest concentration of educational and research institutions, compared to any other area of the U.S. Hospitals, universities and research centers collectively received nearly $1.8 billion in grants from the National Institute of Health, more than any other metropolitan area.
Boston's Public School system has 57,000 students enrolled in its 145 primary, middle and secondary schools. As for Boston's higher education, the public schools also excel, with the Boston Latin Academy, Boston Latin School and John D. O'Bryant School of Math & Science being a few of the better known.
Commuting Time in Boston, MA
While Greater Boston is known as a center of global commerce, academia and cutting-edge biotechnology, the city is also recognized as having one of the top 3 worst commute times in the country and for having the worst traffic and most terrible drivers - at least according to the locals. On the bright side:
- Boston has the fifth-highest use of public transit in the U.S., with over 33% of commuters utilizing mass transit to and from work;
- Boston ranks as the third-most walkable city in the nation, with 13% of the workforce proud to be pedestrian commuters, and the city also has one of the highest rates of bicycle commuters in the nation;
- The streets in downtown Boston do not follow a grid pattern, having developed 'organically' over the years, so commuting by surface streets leaves much to be desired;
- Logan Airport is Boston's primary airport, joined by three general aviation airports to the north, west and south of Boston proper.
- Total Population650,281
- Male Population(48.0 %) 311,843
- Female Population(52.0 %) 338,438
- Median Age31.60
- Average Household Income$85,374
- Median Household Income$55,777
- Median Income Under 25$22,211
- Median Income 25-44$70,623
- Median Income 45-64$61,586
- Median Income Over 65$26,796
- Allston - Brighton Demographics
- Back Bay Demographics
- Bay Village Demographics
- Beacon Hill Demographics
- Charlestown Demographics
- Chinatown - Leather District Demographics
- Dorchester Demographics
- Downtown - Financial District Demographics
- Fenway - Kenmore Demographics
- Mission Hill Demographics
- North End Boston Demographics
- Roxbury Demographics
- South Boston Demographics
- South End Boston Demographics
- West End Boston Demographics
Residential Rents in Boston, MA
When choosing the best place for a business, location research is very important – not only for the office, but also for the employees’ convenience.
Some of the hottest residential neighborhoods in Boston include Bay Village, Chinatown, South End, East Boston and Beacon Hill. Almost every residential area of Greater Boston is in high demand, with limited places to choose from and ever increasing rents. While actual rents will vary by location and amenity, tenants spend an average of roughly $2,500 per month for a one-bedroom apartment and upwards of $3,000 for a two-bedroom place.
Boston, MA Average Rental Price, January 2019
- $ 3,016/mo
- Studio: $ 2,318
- 1 Bedroom: $ 2,797
- 2 Bedrooms: $ 3,416
Boston, MA Rent Trends
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