Redgate is leasing apartments at its 291-unit Gibson Point development in Revere/Image courtesy of Redgate
Apartment rents hit an all-time high in Greater Boston this summer while the pace of construction slowed to a decade-long low.
Newly completed developments in some Gateway Cities and Boston’s outer suburbs are listing rents similar to those posted in Boston’s Seaport District in the 2010s, topping $4 per square foot, commercial brokerage Colliers reported.
Studios at the 331-unit Breakwater North Harbor apartments in Lynn start at $2,000, while the 330-unit Duo Chelsea apartments scheduled to open in November lists studios from $2,375 and 1-bedroom units starting at $2,575.
Across the Greater Boston region, average asking rents of $3.80 per square foot represent an 11 percent increase over those that opened in mid-2023, according to Colliers’ second-quarter multifamily report.
The report is the latest that tracks the end of the robust multifamily development boom both in urban Boston and throughout the metro area. The new construction pipeline represents 5.5 percent of the market’s inventory, down from a peak of over 12 percent in 2019. The last time that figure was this low was 2014, Colliers reported, just after the region emerged from the Great Recession.
Vacancies ended the second quarter at 5.7 percent, in line with the 10-year average, Colliers reported.
According to research by brokerage Berkadia, only 12 major multifamily developments were capitalized in Greater Boston in the past year, reflecting the high construction costs and interest rates making deals unprofitable.
Only one high-rise housing project is under construction in the urban core, a 446-unit tower at 252-264 Huntington Ave. in the Fenway. Somerville’s current pipeline totals just 100 units, according to Colliers.
Developers are gravitating to a select number of suburban sites approved for mid-rise construction, which has lower construction costs, and looking for other projects with other cost-saving advantages such as Opportunity Zone tax incentives or no requirement for income-restricted units.
Middleton-based Procopio Cos. is pursuing a pair of major projects in Marlborough, buying an approved 140-unit development site at 339 Boston Post Road in May, and receiving $41.4 million in financing this month for a 92-unit project at 57 Main St.
According to a separate report this week by RentCafe, Boston ranks 19th nationally in apartment completions this year, with just 1,813 new units expected to open in the city this year.
