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|Boston CRE is holding up compared with other major markets, and doing better than it did in the prior two recessions, said panelists at NAIOP's Mid-Year Market Trends breakfast last week at the Seaport Hotel. That's good and bad news. It reflects controlled supply and steady demand but also a slow-growing population.|
|In his economic overview, PPR's Hans Nordby (here with CBRE's Paul Donahue) said in the critical jobs arena, Boston lost fewer(5%) than the nation as a whole (6%), whereas in the last two recessions the city was on ?the sharp end of the stick.? It lost banking and defense jobs in ?90-?91 and later, crashed during the ?tech wreck.? This time, there's work in healthcare, life sciences and custodial banking; less home pricing volatility and less population growth. But it's a problem, Hans says, ?few people want to move here.? Boston also shares the nation's albatross: debt rising to perhaps 80% of GDP by 2020, putting the US in league with Italy, a place rarely ?associated with sound fiscal policy.? We'll get back to Paul but first …|
|We snapped Richards Barry Joyce?s Michael Joyce who sees some confidence coming back into the Boston office market with more companies relocating, not just renewing and little sublease space. He expects rising Back Bay rents to push more tenants to the Financial District. With little new supply being built, and 12M SF of Class A tenant requirements coming up by 2014, the market should do well. Meanwhile, Paul says the outlook for multifamily is ?very positive? with limited stress from foreclosure, tight supply and rents growing, investors are back with more buyers than sellers. Paul expects rents to rise up to 7% by 2012, which ?will do wonderful things for sale prices.? Meanwhile, he doesn?t expect loan maturities to pose serious issues.|
|Here?s EOP?s John Conley in a quiet moment after the breakfast where he delivered the good news that in the suburban office market?s negative absorption is easing and recovery will happen ?faster than expected.? Interest rates will stay low, stimulus money will continue to flow, and businesses are generating or holding cash they want to spend. Also, with landlords rolling back concessions, tenants are more eager to lease and there are pockets of growth. Eastdil Secured?s James McCaffrey says the ?big deal? is back because money has been raised and the credit market revived. Jones Lang LaSalles?s John Osten says the Cambridge office/lab market has weathered the downturn better than most because of its strong tenant base in tech, life science, and education.|