CBRE/New England is pleased to present you with our 2017 New England Market Outlook. This review seeks to explain the changing dynamics of real estate in the major urban and suburban markets of New England.
Twelve months ago, this missive reported on the relocation of General Electric's corporate headquarters from Fairfield, Connecticut to the Fort Point neighborhood in Boston's Seaport District. During 2016, the migration of other prestigious business brands into Boston continued. Those migrations, combined with existing organic growth, have firmly established Boston as the premier business ecosystem in the Northeast. During 2016, investment capital recognized the maturity of Greater Boston as we witnessed increased property exchanges, as new domestic and international capital flowed into Boston's commercial real estate market.
The desire of workers to be part of integrated communities that host residential, entertainment, social and business life has pushed the previous live-work-play model into the next logical progression. Today's generation of workforce seek VIBE in their workspace (Vibrant neighborhood, Innovative design, Bold amenities and an Entrepreneuial Ecosystem)—VIBE drives velocity. The VIBE that these integrated communities exude is what investors are striving to capture to remain competitive and meet the demands of today's workforce. This is by no means an urban challenge for property owners; suburban property investors are adapting their occupancy strategies and capital planning models to respond accordingly. In many respects, this evolution is not unlike the transformation that occurred in the retail category over the past 10 years, as integrated lifestyle centers with VIBE pressured enclosed malls and neighborhood shopping centers with the threat of obsolescence as the better tenants and higher returns migrated to the lifestyle center category. The commercial property owner who is able to create the feel of an integrated community with VIBE will be able to attract higher quality tenants and demand the highest rental rates.
As we are accustomed to do each year, we are once again proud to report that the employees and tenants occupying space at CBRE/New England-managed properties have continued to set new standards in 2016 for giving back to our communities and helping so many of our neighbors who find themselves in need of assistance. Our philanthropic initiative, CBRE Cares New England, was launched in 2010 to unite our philanthropic goals under the mission of “building a foundation for local communities throughout New England by facilitating a variety of volunteer and giving opportunities that have a significant effect on the lives of families in need, building today for a stronger tomorrow.” Since its inception, CBRE Cares New England has collected over $1.2 million worth of donations for local designated beneficiary organizations. Some of our beneficiary organizations in 2016 were Cradles to Crayons, Loaves & Fishes, Feeding America, Foodshare, The Greater Boston Food Bank, NH Food Bank, RI Community Food Bank, Goodwill (chapters in CT, MA, NH & RI), United Way (of RI, MA Bay & Merrimack Valley, CT) and Toys for Tots.
At the end of 2016, the Electoral College of the United States of America elected Donald J. Trump the 45th President of the United States, ratifying the election results from this past November. The potential for sweeping change from the direction and course the Obama administration established, both domestically and internationally, since 2009 is staggering; change to healthcare, immigration, homeland security, trade, energy, regulatory compliance, defense spending, income tax rates and Federal Reserve monetary policy will all impact businesses this year. We anticipate an unprecedented level of activity to occur during Mr. Trump's first 100 days in office, as the Trump administration capitalizes on the Republican majorities in Congress and the political capital accrued from the election result; buckle up!
On behalf of the entire CBRE/New England community, we wish you a successful 2017!