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Bell Tower Commercial Real Estate Group Insights

The View from the Bell Tower

A Look at the Real Estate Market at Mid-Year

by | Jun 21, 2024

Moving Ahead or Standing Still?

Bell Tower CRE Group has enabled this property, 6 Boston Road in Chelmsford, to stay ahead of vacancies by leasing smaller, more affordable offices.

As we enter the second half of 2024, where is the real estate market heading? What can we look for? At Bell Tower Commercial Real Estate, LLC, our agents are doing business, helping to buy, sell and lease properties on a day-to-day basis. Here is what we are observing.

On the commercial property front there is concern that higher interest rates and the slow recovery from the pandemic – which resulted in many people working from home – will continue for some time. We observe these trends as well, however, for all but the larger urban markets, activity remains. This is not to say that we are not seeing adversity. In the Boston suburbs, vacancy rates are presently at 22%, according to CBRE of Boston. The same sources report that Metro North and Metro West showed negative absorption, while Metro South evidenced a pattern of minor gains in tenancy growth. This area includes Rt. 128 and I-495. In other major cities, including Seattle and San Francisco, real estate investment trusts and owners have sold major office properties at huge discounts. Recommendation for owners: Treat your tenants well and maintain occupancy to the extent possible.

Many people assume that the commercial and residential market function together, but that is not necessarily the case. While interest rates affect both markets, lack of supply has maintained sale prices for homes. While Bell Tower CRE is not a residential brokerage firm, we do assist investors in potential sales or buying opportunities.

2024 and Beyond

In this era of economic and political insecurity, predicting the future of real estate markets is obviously risky in nature. Will interest rates go down? Will taxes go up or down? Which party will control the White House and Congress? There are few ways to answer these questions.

We believe that – to use a golfing analogy – the best thing to do is to take a relaxed swing and aim for the middle of the fairway. This means that investors should be looking for solid values and a positive location. Also, existing owners should do their best to invest when required, maintain tenancies and make concessions in return for long term deals. While discounts will be more apparent when it comes to commercial tenancies, a mixed set of property types should be part of every portfolio. The principle of concentrating on properties that offer the ability to add value in the future is also always a solid strategy.

Bell Tower CRE Group sees offers, deals and changing market values every day. Making guesses about property value in this environment is certainly not recommended. We take pride in working with clients and lending knowledge. Our local market knowledge and relationships with local city and town officials can also make a significant difference.

Gary Sidell, President
63 Park Street

The strength of an attractive local market, such as in Andover, MA, can create its own demand. Bell Tower CRE group has leased 9 offices at 63 Park Street in downtown Andover in the past year, after project managing the transformation of the property.

The real estate market can be challenging as highlighted in the trends reported here. But opportunities can also come up at any time in any market. We work as a team, respecting your priorities and treating your assets with care. We focus on building relationships and delivering value for new and existing clients.

Fred Faust, Principal Broker

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