Boston
MULTIFAMILY
REPORT
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2024 | MID-YEAR
Annual Rent Change
Annual Inventory CHANGE
Deliveries & Absorption
Employment
Rent & Occupancy
Sales
Jobs Added / Lost*
LAST 12 MONTHS
26,700
0.9% YOY
Unemployment*
June 2024
2.9%
10 BPS YOY
Boston is the region’s economic and cultural hub and one of the world’s most powerful cities, attracting new residents and investments. Overall, Boston saw another strong year of economic growth as businesses and institutions added a net 26,700 workers to payrolls, a 0.9% year-over-year gain through June 2024. Hiring in the government and the private education and healthcare sectors made up about 81% of the most recent net jobs gain. Boston’s unemployment rate stood at 2.9% in June, unchanged compared to a year ago. The jobless rate was one of the tightest among major U.S. cities, outpacing the 4.1% national rate, as well as the 3.8% state figure. Boston’s stature as a global hub for the biotech community is boosted by company expansions and the availability of talent. Among those expanding their footprint in the metro is Vertex Pharmaceuticals Inc., which has a 345,000-square-foot facility underway in the Seaport area, referred to as Innovation Square Phase III (ISQ3). Construction on ISQ3 will be completed in 2026, generating approximately 500 permanent jobs for the city. As the largest life sciences employer in Massachusetts, Takeda leased 600,000 square feet in Cambridge’s Kendall Square, providing lab and office space set for occupancy in 2026. One-in-five employees are working in the private education and healthcare sector, where businesses added 15,400 jobs since June 2023.
EMPLOYMENT
Lily to open 700-person Genetic Medicines Institute
READ MORE
LEGO moving North American HQ, 740 new jobs in Boston
READ MORE
Sublime Systems expands HQ campus, creating 400 new jobs
READ MORE
EMPLOYMENT TRENDS
IN THE NEWS
With apartment occupancy rising in recent years, multifamily developers responded by ramping up activity in the Boston market. From 2019 to 2023, roughly 34,780 units came online, representing an 8.9% inventory expansion. Elevated deliveries continued into 2024, with 3,787 units in the first half of 2024. The most recent deliveries are part of a projected 8,710 new apartments slated to be completed by year-end 2024. Developers had 16,413 units across 91 projects under construction as of the second quarter and another 34,600 apartments in the planning and permitting stages. New supply is projected to taper after next year as demand is expected to keep pace amid continued housing interest. Developers continued to focus additions in the submarkets of East Middlesex County and Quincy, where a combined 1,149 units were added through the second quarter of 2024. Renters were drawn to the new inventory in these submarkets. Among the 15 submarkets in the Boston market, rental demand in the East Middlesex County submarket at 746 units and the Quincy submarket at 550 units led net absorption so far this year. The two submarkets combined to represent 44% of total leasing activity. Middlesex County is home to numerous Fortune 500 companies, three universities, and world-class healthcare and research facilities. During the first half of the year, renters newly leased a total of 2,973 apartments.
Deliveries & Absorption
Steady leasing activity has enabled apartment operators to continue raising rent across the market. The average effective rent in Boston was $2,983 per month at the midpoint of 2024. Year-over-year rent growth increased 3.2%, while the national rate inched up only 0.9%, to $1,828 per month. Local rent growth should continue its upward trajectory through 2024, projected to end the year at $3,013 per month. Effective rent ranged from $3,934 per month for Class A properties to $2,294 per month for Class C communities. The average occupancy rate settled at 95.3% in the second quarter of 2024, as demand for multifamily remained positive. Due to strong in-migration and job growth, leasing activity is expected to heighten this year and lift the occupancy rate to 96.0% by the fourth quarter, a projected 70-basis-point annual increase. Helping to keep the occupancy rate elevated are numerous major investments expected to create thousands of new jobs that will benefit the local apartment market in the next couple of years. Eli Lilly & Co plans for a $700 million institute for genetic medicine in Boston’s Seaport District. The opening is slated for 2024 with around 700 employees. The LEGO Group is moving its North American headquarters to Boston, which will start in mid-2025 and is expected to relocate approximately 740 employees.
RENT & OCCUPANCY
2024 Year to Date*
VOLUME
$1.0B
CAP RATE (AVG)
5.1%
Price Per Unit (AVG)
$423,091
TRANSACTIONS
11
WHAT’S TRADING?*
BUILDINGS (AVG)
1
ACRES (AVG)
4.81
YEAR BUILT (AVG)
2000s
UNITS (AVG)
197
Sources: MSCI Real Capital Analytics; CoStar Group; Berkadia Research
SALES
2024 YEAR TO DATE
DELIVERIES
3,787 UNITS
2024 TOTAL*
ABSORPTION
2,973 UNITS
DELIVERIES
8,710 UNITS
ABSORPTION
10,950 UNITS
Effective rent
Q2 2024
$2,983
3.2% YOY
OCCUPANCY
Q2 2024
95.3%
50 BPS YOY
*$50m+
SELLER
Clarion Partners AvalonBay Post Road Residential DSF Group American Realty Advisors
New York, NY Arlington, VA Weston, CT Waltham, MA Los Angeles, CA
LOCATION
Buyer
Carmel Partners Pantzer Properties Nuveen Abacus Capital Group Eaton Vance Real Estate
San Francisco, CA New York, NY Boston, MA New York, NY Boston, MA
Location
Top Buyers*
Top Sellers*
BACK TO TOP
*Projected
Source: RealPage
Y- o-Y Effective Rent Change
0. 3% - 0. 7%
0. 8% - 2. 1 %
2. 2% - 2. 6%
2. 7% - 4. 4%
4. 5% - 6. 5%
1. Cambridge / Somerville
2. Chelsea / Revere / Charlestown
3. East Middlesex County
4. Fenway / Brookline / Brighton
5. Intown Boston
6. Lowell
7. Marlborough / Framingham
8. North Essex County
9. Plymouth County
10. Quincy
11. Rockingham / Strafford Counties
12. South Essex County
13. Southwest Boston
14. Waltham / Newton / Lexington
15. West Norfolk County
SUBMARKET BOUNDARIES
Healthy occupancy amid robust inventory growth underpinned a 3.2% annual advancement in monthly effective rent to an average of $2,983 in the second quarter of 2024. All of Boston’s 15 multifamily submarkets reported rent growth over the past year. Of these, three submarkets had year-over-year effective rent change above or near 5.0%: Rockingham/Strafford Counties, up 11.8%; Plymouth County, up 6.5%; and North Essex County, up 5.5%. The submarkets with the greatest annual rent increases were also the most affordable rental options in the area. Over 25% of Boston’s apartment submarkets now post average effective rents of $3,000 per month or higher, and all the metro area’s 15 submarkets posted rents over $2,000 per month as of the second quarter of 2024. Only the Intown Boston submarket had an average monthly rate above $4,000, up 2.6% annually to $4,124 per month. The suburbs are taking advantage of deep and growing demand.
SUBMARKET MID-YEAR 2024 ANNUAL RENT Change
Annual Inventory Change
0. 0% - 0. 2%
0. 3% - 0. 7%
0. 8% - 1 . 5%
1 . 6% - 2. 4%
2. 5% - 4. 1 %
4. 2% - 5. 5%
1. Cambridge / Somerville
2. Chelsea / Revere / Charlestown
3. East Middlesex County
4. Fenway / Brookline / Brighton
5. Intown Boston
6. Lowell
7. Marlborough / Framingham
8. North Essex County
9. Plymouth County
10. Quincy
11. Rockingham / Strafford Counties
12. South Essex County
13. Southwest Boston
14. Waltham / Newton / Lexington
15. West Norfolk County
SUBMARKET BOUNDARIES
Developers were active in 13 of the 15 apartment submarkets. There were four standout submarkets with more than 1,000 units underway for the year. The Quincy submarket led with 695 units under construction in the first half of 2024, followed by Cambridge/Somerville, home to Harvard and MIT, with 558 units, Plymouth with 458 units, and East Middlesex County with 454 units. The largest project to complete in the first six months of the year was the 526-unit The Laurent, a transit-oriented community located in the city of Cambridge. Helping to absorb the new units in the Cambridge/Somerville submarket will be the 400 new jobs at Sublime Systems headquarters campus, creating 400 new jobs. Long-term projects proposed in the area that will benefit multifamily housing include the $1.2 billion redevelopment by MIT for Kendall Square, and a proposed 1.6 million-square-foot expansion at Somernova’s innovation campus off Somerville Avenue.
SUBMARKET MID-YEAR 2024 ANNUAL Inventory Change
SUBMARKET MID-YEAR 2024 ANNUAL Inventory Change
SUBMARKET MID-YEAR 2024 ANNUAL RENT Change
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© 2024 Berkadia Real Estate Advisors LLC
Berkadia® is a trademark of Berkadia Proprietary Holding LLC Commercial mortgage loan origination and servicing businesses are conducted exclusively by Berkadia Commercial Mortgage LLC and Berkadia Commercial Mortgage Inc. This website is not intended to solicit commercial mortgage loan brokerage business in Nevada. Investment sales and realestate brokerage businesses are conducted exclusively by Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. For state licensing details for the above entities, visit: www.berkadia.com/legal/licensing.aspx
The information contained in this flyer has been obtained from sources we believe to be reliable; however, we have not conducted any investigation regarding these matters and make no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. While we do not doubt its accuracy, we have not verified it and neither we, nor the Owner, make any guarantee, warranty or representation of any kind or nature about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example and do not necessarily represent past, current or future performance of the property. You and your advisors should conduct a careful and independent investigation of the property to determine to your satisfaction the suitability of the property and the quality of itstenancy for your records.
EMPLOYMENT
DELIVERIES & ABSORPTION
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Under Construction/Lease-Up
Lease-Up
Under Construction / Lease-Up
Lease-Up
Deliveries
Absorption
Effective Rent Change
Source: RealPage
Source: RealPage
National Effective Rent
Boston vs. National Effective Rent & Occupancy
Boston Occupancy
SUBMARKET PERFORMANCE
Source: Moody’s Analytics
Source: RealPage
Rockingham/Strafford Counties South Essex County Southwest Boston Waltham/Newton/Lexington West Norfolk County
96.8% 95.6% 93.9% 95.8% 95.1%
-70 -100 -120 -30 -20
$2,243 $2,708 $2,804 $3,239 $2,783
11.8% 3.4% 2.0% 2.1% 4.4%
Cambridge/Somerville Chelsea/Revere/Charlestown East Middlesex County Fenway/Brookline/Brighton Intown Boston Lowell Marlborough/Framingham North Essex County Plymouth County Quincy
94.8% 94.2% 95.7% 92.9% 96.3% 95.8% 95.4% 96.7% 95.7% 94.7%
-40 -80 40 -140 0 -10 -60 -20 -50 -120
$3,710 $2,875 $2,821 $3,638 $4,124 $2,472 $2,515 $2,394 $2,442 $2,618
2.3% 0.3% 2.6% 1.9% 2.6% 4.3% 3.7% 5.5% 6.5% 0.7%
Q2 2024 Occupancy
YOY (BPS)
Q2 2024 Effective Rent
YOY
1/2
2/2
ANNUAL INVENTORY CHANGE
DELIVERIES & ABSORPTION
EMPLOYMENT
ANNUAL RENT CHANGE
SALES
RENT & OCCUPANCY
SUBMARKET MID-YEAR 2024 ANNUAL RENT Change
SUBMARKET MID-YEAR 2024 ANNUAL Inventory Change
Deliveries, Absorption, & effective rent change
Market Pipeline
Top submarket pipelines
Under Construction
Under Construction
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Unemployment Rate
Total Jobs
Boston Effective Rent
National Occupancy
Effective rent and occupancy reflect stabilized properties and does not include preleased units or properties in lease-up. A newly constructed property is considered stabilized once it becomes 85% occupied.
*Seasonally Adjusted
6. 6% - 1 1 . 8%
6. 6% - 1 1 . 8%
