BOSTON BUSINESS JOURNAL - BY Craig M. Douglas
Boston’s strength in the medical and higher-education industries bodes well for its commercial real estate market, as demand for space is expected to rebound in both areas amid an improving economy and the country’s recently passed health-reform law, according to a new report by Fitch Ratings.
The forecast was part of Fitch’s mid-year analysis of the real estate investment trust (REIT) market. The ratings firm upped its outlook for the sector to “stable” from “negative,” citing improved access to capital as well as rosier fundamentals driving property values and occupancy rates.
Fitch said Boston’s multi-family and laboratory/health-care office markets will remain hot spots for investment among REITs. The firm’s outlook calls for improved operating income in 2011 for REITs investing in multi-family housing in Boston as well as San Francisco and Washington, D.C.
Nationally, multi-family vacancy rates are expected to peak at around 8.6 percent this year, Fitch said.
Boston’s real estate market also is benefiting from its abundance in laboratory and health-related facilities, Fitch said. Other major markets boasting strong performances within their clusters of health care affiliated real estate are San Francisco; Washington, D.C.; San Diego; Northern New Jersey; and North Carolina’s Raleigh/Durham region, according to Fitch.
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