No sector of the real estate market has been left untouched, with the lab and industrial markets booming, even as storefronts are shuttered and hotels struggle.

We are two years into a once-in-a-century pandemic that has altered how we work, live, travel, socialize, do business – even what we ultimately value in life.  

And the winners and losers in the real estate from this great upheaval are coming more clearly into view, from a newly hot Western Massachusetts home sales market to nearly empty downtown Boston office buildings. 

No sector of the real estate market has been left untouched, with the lab and industrial markets booming, even as storefronts are shuttered and hotels struggle to put even a few heads on beds each night. 

Ok, we are going to mix things up here, alternating between the biggest pandemic winners and losers in the real estate market: 

Winner: Labs 

The lab market was already hot before the pandemic hit. But the untold billions of government and investor cash pumped into the sector over the past two years, including to hometown giant Moderna, has put thrust the life sciences sector in the Boston area into overdrive. The vacancy rate has fallen below 1 percent, Colliers reports, with seemingly a new announcement every week or two of an office project or existing building getting converted to research space.  

And the demand keeps piling up, with life science and biopharma companies in the market for an additional 10 to 11 million square feet, the commercial real estate firm reports. 

Loser: Offices 

The vacancy rate for the Financial District and other parts of downtown Boston is bad enough, topping 20 percent when you add direct vacancies and sublease space together. That’s a number only typically seen in a bad recession. Just a third of downtown office space is filled on any given day now with living, breathing workers, with construction underway on millions of new square feet of top-shelf space.  

Look for a flight to quality, as tenants scoop up space in some of the new towers taking shape, leaving older towers and class B buildings for cutting-edge corporate addresses with modern ventilation systems designed to reduce COVID risks. 

Winner: Open-Air Shopping  

Think not just Legacy Place in Dedham, which is on the high end of the spectrum, but the dozens of grocery-store-anchored shopping centers, some no more than glorified strip malls. They are booming, filling 17 million square feet in the third quarter alone, according to CBRE.  

Not doing so well are the nation’s enclosed malls, which have lost a third of their value over the past four years, according to The Real Deal. 

Loser: Hotels  

The Roundhouse, a former Best Western near the mess at Mass. and Cass, was redeveloped with much fanfare a few years ago. Today it is one of the centerpieces of Boston Mayor Michelle Wu’s plan to rehouse the homeless from the area’s woebegone tent city nearby. Which is all to say that times are really tough right now for hotels.  

The last time we checked, the total occupancy rate for Boston and Cambridge area hotels had risen 41 percent, up from 2020’s 25.7 percent, but still anemic. 

Winner: Western Mass. 

The surge towards remote work may be finally helping to break through the economic isolation this region has suffered from for so many years. It’s is not just beautiful and distinctive, but a huge bargain compared to overpriced Greater Boston.  

Home prices across the region jumped 9.4 percent year-over-year in November, to $262,000 and are more than 20 percent higher than they were two years ago. Days on market is averaging out to 33 days, down by more than half two years ago, when it was 70, according to the Realtor Association of the Pioneer Valley. 

Scott Van Voorhis

Winner: Warehouses 

We all know that Amazon is hunting high and low for new sites to build distribution centers. But so are Walmart, Target, Walmart and Home Depot, all three of which are trying to place warehouse/distribution operations in the 1 million range, according to Jeff Myers, research director for Colliers in Boston.  

The vacancy rate for high bay/warehouse space in Boston, at 6.8 percent, is less than a third of what the office vacancy rate is. 

Scott Van Voorhis is Banker & Tradesman’s columnist; opinions expressed are his own. He may be reached at   

COVID’s Real Estate Winners and Losers Have Come into Focus

by Scott Van Voorhis time to read: 3 min