Since 1985, the Beige Book, also known as the Summary of Commentary on Current Economic Conditions, has been among the key financial reports distributed in the media. The report is published by the United States Federal Reserve Board eight times a year.
If your eyes are already glazing over, don’t worry! We’ve read the most recent report for you, and we are sharing the highlights that apply to the Boston Metro Area!
First, it is important to understand that this report is a collection of observations and anecdotal information from business leaders within each Federal Reserve district. While not full of hard facts, the Beige Book is a trusted assessment of economic conditions by people in the trenches. Here’s what they have to say about the Boston Metro Area:
1. Respondents to the Federal Reserve survey collectively agree that the office leasing market has firmed, and that vacancy rates are down significantly from one year ago.
2. The Boston seaport district is experiencing high demand. There is also a strong absorption rate in the financial district.
3. Investment sales activity is described as “brisk” – especially for multi-family buildings.
4. The planned development of mixed-use projects is a good signal for additional job growth.
5. The Boston Metro Area is expected to remain attractive to investors due to the strength of the health care and education sectors.
6. While the majority of respondents had a positive outlook, some expressed concern that commercial property valuations in some markets may be trending ahead of income growth. This is a practical concern, and another reason why the services of commercial real estate professionals are essential to investors and business owners.
7. Manufacturing sectors reported strong growth in medical equipment production and pharmaceutical products. The glass is half-full for most of the respondents. Four firms reported plans increase staff; three are holding steady with no plans to add or remove positions. Five reported plans to reduce staff. The variety in these plans reflects the diversity of our manufacturing base and their respective experience in the current economy.
In summary, commercial real estate demand in the Boston Metro Area is expected to grow at a sensible pace, given the market conditions observed in the latest Beige Book. If you are planning to begin, expand or relocate your business, or you are seeking commercial investment opportunities, let us help you! We will provide complete location search assistance and square footage cost analyses.
Contact us today to find the ideal space for your business needs!