It is that time of year when we try to look forward and plan accordingly. For the commercial real estate industry coming off a rather good year, we have to wonder if we are at the top or still growing?
Here are my predictions for the coming year:
1. Foreign buyers will outspend domestic investors for Boston and Cambridge properties and will make a dent in some communities along 128 (e.g. Burlington and Waltham). They will also be a major buyer of Boston condos.
2. Boston properties will be seeing a record number of office properties changing hands with some of those properties having already transferred ownership within the last 3 years.
3. No surprise that office rental rates in Boston and the surrounding areas will be increasing. I predict a minimum of 10% over this year. Apartment rents will continue to rise with some resistance in the newest buildings.
4. The Wynn Casino construction project will not be starting in 2015.
5. There will be one speculative office building announced in Cambridge, that’s it.
6. Design firms will have their busiest year renovating spaces and providing greater efficiency for existing tenants.
7. Construction costs are going to be up substantially, especially in downtown Boston, with greater difficulties getting multiple competitive subcontractor bids.
8. Boston will experience a major hurricane this coming Fall with substantial flooding due to storm surge.
9. The Federal Reserve will finally raise rates.
10. Boston will be selected by the US Olympic Committee to represent the US bid for the Summer Olympics.