Boston’s Apartment Market Swings Back into Landlord Favor

“Recovery is the magic word here,” Michael Boujoulian, managing director of Alliance Residential, tells GlobeSt.com about the Boston market. Thanks to a strong presence of tech and life science companies and a supply-demand imbalance, the New England region has already bounced back from the pandemic-related disruption.

“The tenant’s market has come back to a landlord’s market, and that is really just a function of supply-and-demand and where rents are,” says Boujoulian. “In a lot of places, we are up to full occupancy and at pre-pandemic rents or even higher.”

Before the pandemic, supply was already exceeding demand for apartments. As a result, the city didn’t have the capacity to absorb migration from the CBD or from other nearby metros. The kept the market stable. “There wasn’t enough vacancy in the suburbs to absorb the urban population, so the 10 to 25 mile migration out of the CBD was constrained by our inherent supply problems,” says Boujoulian. “We couldn’t have absorbed 10,000 new people. We just didn’t have the capacity.”

The tech and life science industry also positioned the city for a quick recovery. “The motor here is healthcare, biotech and high technology,” says Boujoulian. “Boston was already further down the road of non-traditional work styles and work hours than any city. There was already a disconnect from the structured employment market, so we were probably a little better prepared for the pandemic. That was a big difference here.”

In addition, Boujoulian notes that Boston is a young city, and the young population was better able to manage the challenges of the pandemic. “There is a resiliency and a stubbornness that comes with youth,” he says. “The city is also relatively low density, so people stayed in town.”

So far, the recovery has offset rent and occupancy loss from the last year, but in some markets that experience little upset, there has actually been organic growth. “There is a recovery happening in earnest, but it is probably a lot of little things rather than one big things,” says Boujoulian. “People are getting back to their lives and to work; some of it is our lab boom and our tech boom. It feels like a sustainable and durable trend.”