US Commercial Property
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Reopening less of a positive for Boston apartments

Greater availability, lower prices and proximity to NYC have supported demand for Boston apartments during the pandemic. That implies demand may edge back as the country reopens, and some workers return to NYC. Rental growth is therefore likely to underperform compared to other cities over the next year or so. However, beyond that, growth in life sciences will continue to create well paid jobs and keep interest in living near the city high.
Matthew Pointon Senior Property Economist
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17 January 2022

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US Commercial Property Update

Key calls for US commercial real estate in 2022

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More from Matthew Pointon

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Home demand drops as prices surge

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Major Apartment Markets Outlook (Q2 2021)

With cities reopening apartment demand will see a substantial rise this year, boosted by the arrival of households who delayed a move last year. Vacancy rates will fall back in all six major cities covered in this Outlook with those hit hardest during the pandemic, NYC and D.C., enjoying the most vigorous recovery in demand as tenants return. Strong prospects for NOI growth mean yields will either edge back or hold steady this year, driving substantial capital growth in all the cities. Beyond that, a gradual rise in yields and shift to larger apartments will weigh on returns. But even San Francisco, which will suffer from its high concentration of tech workers, should see total average returns of around 5.0% p.a. from 2021-25. At the other end of the spectrum, D.C. will outperform with average total returns of 8.5% p.a.

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