New England Investment Opportunities

The commercial real estate market is maturing nationwide, and as this happens trends in new construction and low cap rates in primary markets indicate that the primary markets are offering few great investment opportunities. Secondary and tertiary markets usually lag primary markets by three to five years in the market cycle, and these submarkets continue to offer real estate investors some promising opportunities.

Here is an overview of what 21 George Investors is seeing in the New England commercial real estate market right now:

Boston, MA:  Boston is New England’s primary market and like other primary markets across the country, it offers little opportunity for investors.  Soaring commercial rents increasingly inflated commercial real estate prices across the city are driving down cap rates.  Right now, Greater Boston offers little value to our investors.  With new units being built at a rapid pace, the commercial market will be diluted for many more years.

Southern New Hampshire:  A secondary market to Boston, we have seen the commercial real estate market tighten in recent years.  Values are increasing, and the number of investment opportunities is diminishing, but there are still several good deals in Southern New Hampshire.  This region has a strong local economy, excellent local leadership, improving accessibility, and there are few new housing units coming online.  Yes, southern New Hampshire is a great market when opportunity knocks.

Providence/Pawtucket, RI:  Recently named in Dave Lindahl’s top 10 emerging commercial real estate markets nationwide, sitting just south of Boston, Providence is experiencing overflow from Boston.  Much like southern New Hampshire, it has tightened in recent years but is still an opportunistic market.

Hartford, CT: A tertiary market, Hartford lags some other New England cities in the market cycle.  It has the typical foundation of a New England city (diverse local economy, Hospitals and Universities, and easily accessible).  In addition, it has one of the highest occupancy rates in the country, along with some positive recent economic activity.  Hartford is a rare sub-market of both Boston and New York City, and it will eventually mature in the market cycle as secondary markets tighten up.  Until then, it has several great opportunities.

Fairfield County, CT: A New England market that is a sub-market of New York City, Fairfield County offers a diverse group of cities and towns.  Consisting of mostly wealthy suburbs, the cities of Stamford and Bridgeport drive the commercial real estate market.  Sitting closer to New York, Stamford has experienced significant economic growth in recent years, growth that continues to spur north up the Long Island sound into Bridgeport.

Burlington, VT and Portland, ME: While still sub-markets of Boston, both lie far enough north to stand by themselves.  Both cities are examples of sub-markets reaching maturity in the market cycle.  Both are seeing new residential development for the first time in years, low cap rates and a diluting housing stock.  At the moment, they offer little value to investors, but we’ll be keeping an eye on them.