Disruption 2020: Boston Investment Sales First-Half Lookback

by | 28 July 2020

  • Boston ranked fourth in the country for investment volume through the first half of the year, per Real Capital Analytics. 
  • Boston was #1 for U.S. office volume  with lab a large driver — 28% of all volume. 
  • Overall, Boston investment is down 8% year-over-year through midyear, while nationally volume is off 68%. 
  • Volume collapsed in May and June, with the largest deal the land sale of Widett Circle. 
  • July is expected to be another slow month. 
  • But investors are clamoring for land deals, as shown by Widett Circle, Mount Auburn Club, and GCP Applied Technologies’ Alewife campus. 
  • These purchases by the investment/development community signify long-term confidence in Greater Boston, especially for life science and lab space. 

Real Capital Analytics, in recently released June data, reported that over the first half of the year Boston ranked #4 in the country for total investment volumes (#1 in office volume), up two spots from last year. Boston’s top ranking in office volume was supported by strong lab sales, 28% of all volume. While Boston trailed Dallas, Manhattan, and Los Angeles in terms of transaction volumes, its $7 billion in sales is just 8% below last year’s total. Nationally, sales volumes were off 68%. Most of Boston’s sales took place through April, and total volume in May and June was less than $700 million. In fact, during that time, the $130 million Widett Circle land play was the largest deala second piece of that transaction is still pending. 

Pending and closed transactions for July indicate another slow month. May volumes were down 89% year-over-year, while June was off 63%. Investment flows were more than $110 million higher in June than in May, but this is off of a very low May figure ($289 million). However, investors are showing their long-term commitment to the marketas seen by recent covered land playsparticularly for lab space for the growing life science market. Alexandria Real Estate Equities and National Development acquired the Mount Auburn Club in Watertown for $32 million, and IQHQ has a deal in place for GCP Applied Technologies’ campus in Alewife for $125 million. Combining these two deals with Widett adds up to $332 million in future development land acquisitions, showing that investors have confidence in Greater Boston for the long term.