Investors Find Boston One of Top Worldwide Markets

JLL New England research manager Lisa Strope

BOSTON—The City of Boston’s commercial real estate market continues to garner high marks with the latest accolades coming from a recent survey of global investment activity. JLL reports that Boston ranked fourth in the US and 14 ^th in the world in the brokerage firm’s recent Investment Intensity Index  of top global investment markets. The top five US markets were: Honolulu, Silicon Valley, CA , New York City , Boston and San Francisco . The latest testament to Boston’s strong economy and vibrant commercial real estate market comes after Boston ranked second in the US and fifth in the world in JLL’s most recent City Momentum Index survey. The investment intensity index survey was based on the volume of direct real estate investment relative to the city’s current economic size. London ranked No. 1 on the global investment index list. “This serves as further recognition that Boston has become one of the most important ‘Innovation Hubs’ in the world and a strategic location for many global brands to plant their flags,” says JLL New England research manager Lisa Strope . “Building on our highly educated workforce, our ecosystem of innovation, and an unemployment rate below the national average, Boston’s economy is poised to extend its strong run of growth.” The world’s most globalized metropolitan economies continue to account for a major portion of global commercial real estate transactions, JLL reports. In fact, the top 10 cities for transaction volumes accounted for almost 30% of global commercial real estate investment over the past three years. “With pricing at or near record levels in many gateway cities, ‘New World Cities’ can offer better value for investors and are establishing themselves as consistent and liquid markets which are open and transparent,” says Jeremy Kelly, director, global research for JLL. “A broad range of investors now recognize the inherent strengths of New World Cities as dynamic clusters of business activity that offer scalable real estate investment opportunities.” JLL characterizes New World Cities, such as Boston, as small to medium-sized cities with transparent, open real estate markets and favorable infrastructure and livability platforms. “They are building dynamic economies and real estate markets through innovation and demonstrate an ability to transform and adapt to a constantly changing socio-economic landscape,” the brokerage states. JLL research finds that European New World Cities that boast innovation, sustainability and a high quality of life such as Munich, Copenhagen and Stockholm, are attracting significant investment. Meanwhile, US and Australasian New World Cities with strong research systems and technology credentials are also among the top tier for global investment, such as: Sydney, Auckland, Melbourne and Brisbane, and Silicon Valley, San Francisco and Austin, TX . Emerging global cities, such as Shanghai and Beijing, continue to attract significant amounts of global capital direct investment. However, investment into emerging markets fell overall by one third in 2015 to 5.5% of total global volumes of $704 billion, JLL states. The decline in real estate investment in this sector can be attributed to China’s economic slowdown, lower commodity prices and overall volatility of emerging market currencies. Among the big losers that suffered significant investment volume declines last year as compared to the 2012 to 2014 period included Mexico City, Sao Paulo, Johannesburg and Moscow. The top 20 in JLL’s Investment Intensity index were: 1. London 2. Oslo 3. Munich 4. Sydney 5. Honolulu 6. Copenhagen 7. Auckland 8. Frankfurt 9. Silicon Valley, CA 10. Melbourne 11. New York City 12. Stockholm 13. Paris 14. Boston 15. Dublin 16. San Francisco 17. Austin, TX 18. Edinburgh 19. Brisbane 20. Berlin