While it’s impossible to predict what is going to happen in commercial real estate, there are a number of economic factors to consider that could give an indication of what’s to come. Part of what I do as a commercial real estate agent in Boston’s Metro South area is look at what’s been happening in the current market and advise my clients to make decisions about finding new office space based upon these economic indications. This isn’t a perfect science, but it does help my clients make smart decisions that will ultimately benefit their business.
What’s been happening in real estate is that the housing market saw a steep decline in activity last year. This year, things have gradually been picking up. Many industry analysts have been waiting for commercial real estate to suffer a similar decline in activity, and while our sector has been struggling, it was never enough to cause the national financial crisis that the housing sector did.
What’s happening now is that commercial sectors are seeing some signs of life. Downtown areas all over the country are seeing empty retail and office space fill up with eager occupants. Many suburban areas are still showing some signs of struggle, but things are certainly improving in that arena as well.
What’s important to note, however, is the lack of new commercial space coming on to the market. Since job growth has been slow, there hasn’t been as strong of a need for growth in this arena. This is important for businesses that are looking to grow or relocate their offices. If you want to do so, you will likely have to move into an existing, vacant space. These current market conditions force us to look in to what’s to come in 2013.
There is a strong likelihood that job growth will improve, meaning that there will be more of a demand for new office space and less of a supply. This will cause many landlords to raise their rents. Assuming that growth continues the way that it has been, we could run in to a situation where businesses are struggling to find office space due to the lack of new space available.
So, what does this mean for those in the commercial sector? If you’re looking for a new office space, now is the time to search and sign a lease, because in a year or so you may well struggle to find a vacancy. If you’re already in a space you’re happy with, you should try to extend your lease for as long as possible. If you’re a landlord, wait out the slump—you’ll see an uptick in business shortly.
There’s no guarantee that this is how the market will pan out for businesses in Boston’s Metro South area, but there are several key economic indicators that suggest this outcome. If you have any question about finding the right office space in Boston’s Metro South area, feel free to contact me. I’ll give you my unbiased advice about whether or not now is the best time for you to be searching for new space.