A study confirms what many developers and landlords have been saying: it’s good to own transit- and pedestrian-friendly real estate in Greater Boston and other coastal metros.

Boston trails only New York City and Washington, D.C., in the rent premiums that walkable commercial and multifamily properties fetch compared with their suburban counterparts, according to a study of 30 large metros released today by LOCUS, a national coalition of urban real estate developers and investors. The group is holding its national leadership summit this week in Boston.

The study by researchers at George Washington University’s Center for Real Estate & Urban Analysis encompassed 619 walkable urban places (WalkUPs) with floor area ratios above 1.0, mixed uses and multiple transportation options.

Office space in walkable urban areas had rents that were 75 percent higher than suburban counterparts nationwide.

In Greater Boston, where 32 percent of occupied office, retail and multifamily space is located in some 57 WalkUPs, the rent premium was 96 percent compared with suburban properties in the fourth quarter of 2015. Although walkable urban places comprised only 1.2 percent of the region’s acreage, they accounted for 93 percent of office and multifamily absorption between 2010 and 2014.

The strong demand for urban properties has been felt in all 30 of the nation’s largest metros since 2015, and has the potential to drive economic development in the same way that the suburban migration did in the mid- to late-20th century, the report stated.

In Boston and Washington, D.C., half of the occupied WalkUP space is located in suburban jurisdictions, possibly a reflection of the small land mass of the core cities. The report ranked Boston second only to New York in its potential for future walkable development, based upon recent absorption trends and rent premiums favoring urban spaces.

Study: Walkable Real Estate Pays Off

by Steve Adams time to read: 1 min
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