Produced by the BPDA Research Division

Produced by the BPDA Research Division:

Alvaro Lima – Director Jonathan Lee – Deputy Director Christina Kim – Senior Research Associate Phillip Granberry – Senior Researcher/Demographer Matthew Resseger – Senior Researcher/Economist Kevin Kang – Research Associate Jing Chen – Research Assistant Avanti Krovi — Research Assistant Kelly McGee – Research Manager Interns: Erin Cameron & Ahsim Shaaban

The BPDA Research Division strives to understand the current environment of the city to produce quality research and targeted information that will inform and benefit the residents and businesses of Boston. The Division conducts research on Boston’s economy, population, and commercial markets for all departments of the BPDA, the City of Boston, and related organizations. The information provided in this report is the best available at the time of publication.

All or partial use of this report must be cited. Our preferred citation is as follows: Boston Planning & Development Agency Research Division, January 2019

More research produced by the Boston Planning & Development Agency can be found on the BPDA Research Website: Research Publications

Research requests can be made through the BPDA Research Division’s Research Inquiries.

2 Brian P. Golden, Director . The BPDA Research Division maintains a dataset of projects approved through Article 80B Large Project Review, 80E Small Project Review, 80A Notice of Project Change, 80C Planned Development Area Review, or 80D Institutional Master Plan Review (see Glossary). Details including square footage, residential units, and development cost are recorded at initial approval and again if a project receives an NPC approval. Permit and certificate of occupancy data come from the Inspectional Services Department and allow the Research Division to track project lifecycle from approval through construction and completion.

. This Report analyzes development trends in five sub-markets (housing, office, hotel, industrial, and institutional) while describing concurrent economic and demographic trends that may influence development. Together, these data depict the recent cycle of real estate development in Boston, from the beginning of Article 80 in 1996 through the development downturn during the 2008-2009 recession to the recent development boom coinciding with the city’s economic recovery.

3 . Article 80: Adopted in 1996 by the BPDA to provide clear guidelines for the development review process, including but not limited to review of a project's impacts on transportation, public realm, the environment, and historic resources. Public input is encouraged throughout a project's review timeline.

. Institutional Master Plan: Planning and zoning document required by Article 80-D for all colleges, universities, and hospitals with over 150,000 square feet of tax-exempt real estate. IMPs are generally renewed every ten years.

. Large Project: Required for all projects that involve the addition of an aggregate gross floor area of more than 50,000 square feet.

. Notice of Project Change (NPC): A document which may be filed by a project proponent with the BPDA if the project scope undergoes changes that are substantial enough to call for additional review and approval.

. Small Project: Required for projects that involve the addition of an aggregate gross floor area of between 20,000 and 50,000 square feet and/or any project that results in the creation of 15 or more dwelling units.

. Planned Development Area: An overlay zoning district which may be established under Article 80 where a development that is well-suited to its location cannot be accommodated by the general zoning for the area. For example, a development that involves a large building, a cluster of buildings, or a mix of uses.

. 3-Year Rule: If a project is approved and then returns to the BPDA for an NPC within three years, the net change in square footage, development cost, and units is recorded. If the NPC returns to the BPDA more than three years since the project was originally approved, the gross square footage, development cost, and units are recorded.

Source: http://www.bostonplans.org/about-us/glossary 4 Contents

• • • • • 1. Recession from Beginning of American Recovery and March to November Great Recession Record High 103 Reinvestment Act passed; Article 80 Approvals Article 80 adopted; End of Recession Beginning of Pipeline New High of 58 Database entries Article 80 Approvals

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Dot-com bubble bursts; NASDAQ falls Federal Reserve begins from peak of 5,000 Quantitative Easing policy Unemployment falls Big Dig officially completed below 4% for first (construction began in 1991) time since Recession

Recession 7 $150 10%

$140 9%

$130 $121.7 8% $120 7%

$110 6%

$100 5%

$90 4%

$80 3%

$70 2%

$60 1%

$50 0%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Recession GCP (Billions of 2017$) Recession Boston Workforce Development Area Massachusetts

Boston’s total annual economic activity has increased by $29 billion since 2002 and has grown at an average 2018 July - Jan rate of 2.6% per year since 2009. Average annual unemployment hit a low of 3.7% in 2017, with Boston’s rate remaining below Massachusetts’.

Source: U.S. Bureau of Economic Analysis; Massachusetts Executive Office of Labor and Workforce Development (EOLWD), BPDA Research Division Analysis. 8 Payroll and Non-payroll Jobs Located in Boston 794,038 800,000

700,000 674,188 672,079

600,000

500,000 The number of payroll and non- 400,000 payroll jobs increased 24% to Jobs 794,000 in 2016, from a recent 300,000 low of 639,000 in 2004. 200,000

100,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Source: U.S. Bureau of Economic Analysis; Massachusetts Executive Office of Labor and Workforce Development (EOLWD), Employment and Wage (ES-202), BPDA Research Analysis. 9 2. 8%

6.9% 7%

6% Rates have stayed below 5% 4% since 2009 and have 4% only recently begun to rise 3.1% from a low of 1.6% in 3% 2016.

2% American Recovery and Reinvestment Act Passed, Federal 1% Reserve cuts interest rates 1.6% Feb 2009

1999 1996 1997 1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Recession Interest Rate

Source: US Department of Treasury; Federal Reserve Bank of St. Louis, BPDA Research Division Analysis. 11 240

219 220 216

200 Since 1996, the price index for inputs to new 180 construction has increased 64%, with brief dips in 2009 160 Recession and 2015-2016. 1986 100 = 140 132

120

100

2004 2009 2014 1996 1997 1998 1999 2000 2001 2002 2003 2005 2006 2007 2008 2010 2011 2012 2013 2015 2016 2017

Source: U.S. Bureau of Labor Statistics, Producers Price Index Industry Series, BPDA Research Division Analysis. 12 140

120

Crude Oil Natural Gas Plywood Aluminum Iron Ore 100 Per Million Per dry metric Per barrel British Thermal Per sheet Per metric ton Unit ton Units 80 $107 $9.68 $7.54 $3,108 $171 10-year high 60 (2012) (2008) (2007) (2007) (2008) 100 = 2010

$52 $2.81 $5.18 $1,912 $64 10-year low 40 (2016) (2012) (2015) (2015) (2015)

20 2017 $61 $3.42 $5.62 $2,274 $83

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Recession Energy Index Iron and Steel Index Timber Index

Sources: Federal Reserve Bank of St. Louis, Producer Price Index by Commodity for Metals and Metal Products: Iron and Steel, Updated August 9, 2018; The World Bank, Commodity Price Data (The Pink 13 Sheet), Updated June 2018, BPDA Research Division Analysis. $2,060 $2,100 25,000

$2,000 Weekly average wages for Boston $1,868 18,776 20,000 workers in the construction $1,900 industry grew at an average $1,800 annual rate of 0.9% between 13,849 15,000 2001 and 2017, compared to $1,700 0.7% for all industries. 10,000 $1,600 Employment Rising wages and employment $1,500 reflect the high demand for (2017$) wage weekly Average 5,000 construction labor. $1,400

$1,300 - 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Recession Construction Jobs Average Weekly Wage for Construction

Source: U.S. Bureau of Labor Statistics and the Massachusetts Executive Office of Labor and Workforce Development (EOLWD), ES-202 Wage and Employment data, BPDA Research Division Analysis. 14 Total Square Footage and Projects Approved by Project Type 16

6 Square Feet (Millions) Feet Square 4

2 Total projects approved, 6 26 32 39 66 56 50 56 64 61 58 53 58 20 50 49 44 80 66 76 100 74 51 0 including NPCs

Recession Large Project NPC Small Project

Source: BPDA Pipeline Database (current as of October 1st, 2018), BPDA Research Division Analysis. Number of projects refers to total board actions, counting original approvals and NPCs once each. Square foot totals take the net 15 square footage except for projects outside of the 3-Year rule, where the square footage is counted twice. Industrial Other 2% 8%

Retail

Hotel 6%

Residential 47%

Institutional 14%

Office 18%

Source: BPDA Pipeline Database (current as of October 1st, 2018), BPDA Research Division Analysis. Net square footage taken, disregarding 3-year rule. 16 Millions of Square Feet - 5 10 15 20 25 30 35 40

Downtown 35.8

South Boston Waterfront 34.1

Fenway/Back Bay 24.5

Allston/Brighton 17.7

South End 14.9

Dorchester 8.3

Roxbury 8.2

South Boston 7.9

Longwood/Mission Hill 7.9

East Boston 7.0

Jamaica Plain 4.6

Charlestown 4.0

Mattapan 2.5

West Roxbury 2.2

Hyde Park 1.5

Roslindale 1.1

Source BPDA Pipeline Database (current as of October 1st, 2018), BPDA Research Division Analysis. Gross square footage of most recent approval taken. Downtown includes Chinatown, Leather District, West End, North End, and 17 Beacon Hill. South End includes Bay Village. Square footage updated to reflect data improvement, January 2019. 0.30

0.25

0.20

0.15

0.10

Millions of Square Feet Square of Millions 0.05

0.00

Source: BPDA Pipeline Database (current as of October 1st, 2018), BPDA Research Division Analysis. Project square footage based upon original approval date, excluding NPCs. 18 16

14 Projects approved leading up to or 12 during a recession tended to return

10 to the Board for changes in the future. 8

6 of Square Feet Square of 46% of square footage approved in 4 2001 and 48% of square footage

Millions Millions approved in 2007 returned to the 2 Board in subsequent years. 0

Recession Received NPC in future year Received NPC in current year Never received NPC (as of 2018) Source: BPDA Pipeline Database (current as of October 1st, 2018), BPDA Research Division Analysis. Square foot totals take net square footage except for projects outside of the 3-Year rule, where the 19 square footage is counted twice. 3.5 6 3.2 3.0 3.0 5

2.5 4

2.0 1.7

1.6 1.6 3 Years

1.4 Years 1.5

2 1.0

0.5 1

- 0 Small Large Small Large Small Large 2006 2007 2008 2009 2010 2011 2012 2013 2014

Approval to Building Permit Building Permit to Completion Total time approval to completion Recession Average years from approval to permit Average years from permit to completion Average total years from approval to completion Source: BPDA Pipeline Database (current as of October 1st, 2018), BPDA Research Division Analysis. Time to permitting calculated by taking the average days between original approval and first construction permit for all projects with a permit. Time under construction calculated by taking the average days between 20 construction permit and certificate of occupancy for all projects with both. Time to completion calculated by taking the average days between original approval and certificate of occupancy for all projects with a COO. For projects that have received an NPC, timelines calculated from original approval date. Charts updated January, 2019 to reflect data improvement. Following the recession, project approvals saw a sharp increase in 2013. A spike in permitting followed, with the most permits issued in 2015. A second wave of approvals in 2016 will likely produce an increase in permitting and construction in the near future.

100 100

90 80 76 80 74

70 66 65 58 58 60 54 53 62 50 49 50 44

40 40 30 20 20

10 17

0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Recession Projects Approved Projects Permitted Projects Completed

Source: BPDA Pipeline Database (current as of October 1st, 2018), BPDA Research Division Analysis. All approvals within a year are counted, including projects that have returned to the Board for a project change. Projects only 21 counted in one year for permitting and completion. 3a. 700,000 683,015 680,000

660,000

640,000 617,594 Boston’s population has grown by 620,000 approximately 93,000 since 2000. 600,000 589,141 580,000 According to the BPDA’s Population 560,000 540,000 Projection,1 the population is expected to 520,000 increase to 760,000 by 2030, still slightly 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 less than the high of 800,000 in 1950. Recession Population Trend Line Source: U.S. Census Bureau, 2017 1-year American Community Surveys and 2000-2010 Decennial Census, BPDA Research Division Analysis

2010 to 2017 Compound Annual 1990 2000 2010 2015 2016 2017 Growth 1 For more information, see Housing a Changing City, Boston 2030: 2018 Update. Massachusetts 6,016,425 6,349,097 6,547,629 6,794,422 6,811,779 6,859,819 0.7% https://docs.google.com/document/d/1WRWTkvId7_hAKiKz-_F8- Metropolitan J_HCq5mCrWKxBUeFOVgwaM/edit Boston* 4,133,895 4,391,344 4,552,402 4,774,321 4,794,447 4,836,531 0.9%

City of Boston 574,283 589,141 617,594 669,469 672,840 683,015 1.4% Source: U.S. Census Bureau, 2015-2017 1-year American Community Surveys and 1990-2010 Decennial Census, BPDA Research Division Analysis *Boston-Cambridge-Newton, MA-NH Metro Area 23 . Original goal: build 53,000 units by 2030, based on expected population of 709,000 by 2030.

. Since inception of plan, 27,513 units have been permitted, including:

. 2,085 low income restricted rental housing units

. 8,492 middle income units

. In 2018, Boston updated its goal to 69,000 new units by 2030, based on a revised population projection of 760,000 and the city’s progress in constructing new housing.

Source: Housing a Changing Boston 2030: 2018 Update, published September 2018. 24 200,000 In 2017, there were 293,538 housing units in the City, of 180,000 173,890 which 91% were occupied. 160,000

Of occupied units, 35% were 140,000 owner-occupied in 2017. 120,000

Vacancy data also includes new 100,000 94,414 units that have entered the 80,000 market for sale but are not yet 60,000 occupied. 40,000

20,000

0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Recession Owner occupied Renter occupied Source: U.S. Census Bureau, 2005-2017 American Community Surveys 1-Year Estimates, BPDA Research Division Analysis 25 30-Year Fixed-Rate Mortgage Rate 40%

35% 35% 35% 32% 31% 30%

25%

20%

15%

10% 9.8% 8.2%

5% 5.1% 4.2%

Recession 30-Year Fixed U.S. Mortgage Rate Boston Homeownership Rate

Source: Freddie Mac, via the Federal Reserve Bank of St. Louis, BPDA Research Division Analysis. Source: U.S. Census Bureau, 1970-2010 Decennial Census, 2017 1-year American Community Survey, BPDA Research Division Analysis 26 $70,000 $1,700 $1,654 $1,633 $66,758 $1,617 $64,976 $1,600 $1,566 $1,546 $1,539 $1,548 $65,000 $63,959 $1,514 $1,499 $1,485 $1,485 $1,500 $1,483 $1,541 $1,523 $60,255 $59,673 $60,000 $58,846 $58,917 $1,472 $58,333 $1,400 $56,085 $56,381 $1,386 $1,400 $1,366 $55,134 $1,349 $1,300 $1,329 $55,000 $53,484 $1,313$1,309 $1,317 $1,286 $1,200

$50,000 $1,100

$45,000 $1,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Recession Median Income Recession Median Monthly Ownership Costs Median Gross Rents

Median monthly rent increased by 17% from 2006 to 2017, faster than median household income, which grew 14% in the same time period. Monthly ownership costs grew only 9%. The percentage households that are housing cost burdened (pay 30% or more of household income on housing costs) decreased from 49% in 2006 to 41% in 2017.

Source: U.S. Census Bureau, 2006-2017 American Community Survey 1-Year Estimates; U.S. Bureau of 27 Labor Statistics, Series IDs: CWURS11ASA0 and CUURS11ASAH, BPDA Research Division Analysis $800,000 12,000 11,432 10,931

$700,000 9,673 10,000 8,484 8,659 8,463 $600,000 8,154 8,156 7,797 7,651 $549,000 8,000 7,374 62% 7,173 7,180 7,231 $500,000 64% 6,736 6,715 6,294 66% $400,000 6,000 59% 59% 69% 68% 55% 68% 67% 68% 67% 68% 68% $300,000 65% 64% 62% 4,000

$200,000 24% 23% 29% 25% 25% 21% 2,000 18% 16% 16% 15% 16% $100,000 19% 21% 22% 24% 16% 16% 14% 13% 16% 16% 15% 13% 13% 13% 15% 15% 15% 17% 17% 17% 17% 17% 17% $0 - 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Recession Single-Family Two-Family Recession Single-Family Sales Multi-Family Residential Sales Condo Sales Three-Family Condo Residential sales gradually declined from 2004 through the recession and didn’t hit bottom until 2011. Sales increased through 2015 but have since fallen. Meanwhile, prices of units, particularly two-family and three-family units, have consistently increased since 2009.

(1) Rounded to the nearest multiple of 50. Source: City of Boston, Department of Neighborhood Development Using Banker & Tradesman Data (January 2018), BPDA Research Division Analysis. 28 10 9.2 9

7 6.6 6.5

6 5.7 5.2 5.0 5 4.8 4.4 4.5 4.4 4.1 3.9 4.1 4 3.4 3.0 3.2

Millions of Square Feet Square of Millions 2.8 3 2.5 2.6

2 1.3 1.5 0.9 1 0.5

0 Aug - 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Jan - Dec Oct 1996 2018

Source: BPDA Pipeline Database, current as of October 1st, 2018, BPDA Research Division Analysis. Square footage associated with NPCs counted as net change except for projects that were approved more than three years prior, for which total square footage was counted (3-year rule). 29 8 Government Center Garage: 812 units, 764,800 SF

7 Seaport Square Block B & C: 832 units, 1.5 million SF Olmsted Green: 523 units, 851,000 SF Millennium Tower: 600 units, 800,000 Georgetown Homes: 967 units, 830,700 SF 6 SF

4 Portside at Pier I: 543 units, 873,000 SF

Ink Block Project: 546 units, 569,000 SF Millions of Residential Square Feet

0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Jan - Oct 2018

Recession Permitted Completed 30 Source BPDA Pipeline Database, current as of October 1st, 2018, BPDA Research Division Analysis. Square Footage counted as gross of most recently approved version of project. 9,000 8,524

8,000

7,000 6,644 6,320

6,000 5,784 5,756 5,360 5,135 5,184 5,083 5,010 4,892 5,000 4,653 4,210 4,005 4,141 4,000 3,560 3,444 3,558 2,898 2,928

3,000 2,770 Number of Residential Units

2,074 2,120 1,955 1,864 2,000 1,782

1,256 1,206 1,126 948 991 1,000 757 827 860 572 610 522 482 53 - 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Jan - Oct 2018

Recession Approved Permitted Completed

Source: BPDA Pipeline Database, current as of October 1st, 2018, BPDA Research Division Analysis. Approved units associated with NPCs counted as net change except for projects that were approved more than three years prior, for which total units were 31 counted (3-year rule). Units permitted and completed counted as the gross units for the most recent project approved. Units permitted and completed updated January, 2019 to reflect data improvement. 3b. 62 61.1

60 58.0 58

56 There are 313 office buildings in 54 53.1 Boston and 10 million square 51.8 feet are available for lease.

52 Millions SF OfficeMillions

Source: CoStar Office Data, BPDA Research Division Analysis. 33 - 5 10 15 20 25 30 35 40 45

Financial District 42.2

Back Bay 17.9

Seaport/South Boston 13.7

Longwood/Fenway 8.4

North Station/Beacon Hill 6.3

Midtown 5.3

Roxbury/Dorchester/Mattapan/Hyde Park 4.8

Charlestown/East Boston 4.2

South End 3.7

North End/Waterfront 3.2

Allston/Brighton 3.0

34 Source: Costar Office Data, BPDA Research Division Analysis. $80 $77 16%

13.6% $70 14% 13.0% $60 12% $52 Vacancy is currently at 9.9% in $50 10% Boston, compared to 16.9% $41 nationwide. $40 8% 7.3% 9.9%

$30 6% Rate Vacancy Asking rent for office space is $52/sqft in Boston, compared Market Asking Rent (2017$) Rent Asking Market $20 4% to $36/sqft nationwide.

$10 1.8% 2%

$0 0%

Recession Asking Rent (2017$) Vacancy Rate

Source: Costar Office Data, BPDA Research Division Analysis. 35 9% 8% 7% 6% 5% Vacancy is highest in the Financial 4% District and the Seaport, which 3% may be due to large amounts of 2% new construction resulting in new 1% available space. 0%

2018 Q3 5-Year Average 36 Source: Costar Office Data, BPDA Research Division Analysis. $60 $53 $51 $49 $50 $46 $44 $42 $40 $40 $38 $38 $34 $31 $32 $29 $30

$20

$10

2018 Q3 5-year Average 37 Source: Costar Office Data, BPDA Research Division Analysis. Boston has added almost 26,000 250,000 jobs in information, 217,352 200,000 191,456 finance/insurance, professional 185,255 166,926 and technical services, and management since 2001. 150,000

Reebok, New Balance, and Amazon 100,000 are among the companies that have opened or are soon to open 50,000 new offices in the city.

Source: Bureau of Economic Analysis (BEA), Massachusetts Executive Office of Labor and Workforce 38 Development (EOLWD), Employment and Wage (ES-202), BPDA Research Analysis. 2018 surpassed the record set by 2017 in office square footage approved, with 3.8 million square feet set to be built

4.0 3.8 3.6 3.5 3.2 3.0 3.0

2.5 2.5 2.4 2.1 2.0 1.9 2.0 1.9 1.9 1.6 1.5 1.5 1.5 1.2 1.2 1.2

Millions of OfficeSquare Feet 1.0 0.9 0.8

0.5 0.3 0.1 0.0 0.0 Aug - 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Jan - Dec Oct 1996 2018

Source: BPDA Pipeline Database, current as of October 1st, 2018, BPDA Research Division Analysis. 39 Square footage associated with NPCs counted as net change except for projects that were approved more than three years prior, for which total square footage was counted (3-year rule). 3.0 Government Center Garage Project: 1.1 Landmark Center: 1.2 million SF million SF Millennium Tower: 218,000 SF 2.5

Boston Landing Project: 1.3 2.0 million SF

Channel Center: 962,800 SF

1.5 Millions of SquareFeet Russia Wharf Redevelopment: 709,500 SF 1.0

0.5

0.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Jan - Oct 2018

Recession Office SF Permitted Office SF Completed

Source: BPDA Pipeline Database, current as of October 1st, 2018, BPDA Research Division Analysis. Square Footage counted as gross of most recently approved project. 40 3c. • Suffolk County received $8.8 billion in domestic travel expenditures (half of Massachusetts's total) in 20161

• The Greater Boston Convention & Visitors Bureau projects visitors to Greater Boston to increase from 21.2 M in 2017 to 22.7 M in 20192

• As of March 2018, Boston had 85 licensed hotels, totaling 21,000 rooms3

1 Research Department of the U.S. Travel association, prepared for the Massachusetts Office of Travel and Tourism, “The Economic Impact of Travel on Massachusetts Counties, 2016” https://www.massvacation.com/wp-content/uploads/2016/11/MA-2016-Report-Oct-4-2017-2.pdf?x90875 2 Greater Boston Convention & Visitors Bureau, Statistics & Reports, https://www.bostonusa.com/media/statistics-reports/ 3 Boston Source: Boston Licensing Board and STR Inc, BPDA Research Analysis. 42 The hotel occupancy rate has risen to 83% since a low of 71% in 2009. Optimal occupancy rates range from 75% to 85% for full-service hotels, according to STR.1

25,000 100%

95% 20,143 20,000 90%

85% 15,782 15,000 80% 82.4% 75%

Hotel Hotel Rooms 10,000 70% OccupancyRate

70.5% 65%

5,000 60%

55%

0 50%

Recession Room Supply Occupancy Rate % 1 Optimal occupancy is the level where hotels hit peak gross operating profit, after which operational costs lead to diminishing returns http://www.hotelnewsnow.com/Articles/88561/Peak-profitability-Finding-balance-of-occupancy-rate Source: ADR and Occupancy reported by Pinnacle Advisory Group. BPDA Research Division count of room supply at the end of each calendar year. 43 Room Supply counts only rooms in hotels of 50 or more rooms. $300

$264 $261 $259 $249 $249 $239 $240 $250 $230 $235 $222 $222 $216 $217

Average daily rate (a $200 measure of average rental income per paid occupied $150

room in a given year) has (2017$) Rate Daily $100 grown 20% since 2005.

$50

Recession

Source: Pinnacle Advisory Group, BPDA Research Division Analysis. 44 65,000 62,609 Accommodation and food services added 19,000 jobs in Boston since 2001 60,000 (3rd most among industries). 55,000 It was the 5th largest employment

50,000 category in 2016, making up 8% of jobs. Employment

48,209 45,000

40,000

Source: Bureau of Economic Analysis (BEA), Massachusetts Executive Office of Labor and Workforce Development (EOLWD), Employment and Wage (ES-202), BPDA Research Analysis 1.6

1.4

1.2

1.0

Hotel SF Hotel 0.8

0.6 Millions Millions

0.4

0.2

0.0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Jan - Oct 2018

Source: BPDA Pipeline Database, current as of October 1st, 2018, BPDA Research Division Analysis. Square 46 footage associated with NPCs counted as net change except for projects that were approved more than three years prior, for which total square footage was counted (3-year rule). 1.2 D Street Hotel (Aloft): 311,000 SF Hotel Commonwealth: 133,000 SF

1.0 Government Center Garage hotel: 315,000 SF

0.8

Boston Landing Hotel: 140,000 SF 0.6

AC Hotel South End: 30,000 SF Millions of SFHotel 0.4

0.2 Boston Garden Hotel: 200,000 SF

0.0 2011 2012 2013 2014 2015 2016 2017 Jan - Oct 2018

SF Permitted SF Completed

Source: BPDA Pipeline Database, current as of October 1st, 2018, BPDA Research 47 Division Analysis. Square Footage counted as gross of most recently approved project. 3d. • Industrial space in 1998 totaled 30.3 million square feet; inventory in 2018 Submarket Industrial Inventory Roxbury / Dorchester 9,122,887 totaled 24.8 million square feet Fort Point Channel / South Boston 4,720,548 • The Roxbury/Dorchester submarket Downtown Boston 4,396,189 South Suffolk County 4,167,789 has the largest inventory in Boston at (W Roxbury, Mattapan, Hyde Park) Brighton / Fenway 2,372,502 9.1 million SF Total 24,779,915

Source: CoStar Industrial Data. Includes Downtown, South Suffolk County, Brighton/Fenway, Roxbury/Dorchester, and Fort Point/South Boston sub-markets 49 $18 18% $16.25 $15.75 $16 16% 15% The Brighton/Fenway $14 14% $12.92

(Fixed 2017$) submarket has the highest $12 12% industrial rents in Boston,

$10 10% at $25 per square foot.

$8 8% 8% Citywide vacancy rates have Vacancy Rate

Rent Rent perSquare Foot $6 6% increased slightly since 2016 5% $4 4% but are almost half the rate in 2005

$2 2% Average Asking $0 0%

Recession Average Asking Rent Vacancy Rate

Boston asking rent calculated by taking average of 5 submarkets: Roxbury/Dorchester, South Suffolk County, Brighton/Fenway, Ft Point Channel/South Boston, and Downtown. Vacancy rate calculated by dividing total vacant space across 5 submarkets by total inventory. 50 Source: CoStar Industrial Data, accessed 12/11/2018, BPDA Research Division Analysis. 35,000 30,942 30,000

25,000 Transportation and warehousing has grown at a 20,000 compound annual rate of 15,000 5.3% since 2001, the highest 10,262 of any industry in Boston. 10,000

5,000 7,916

0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Recession Manufacturing Wholesale Trade Transportation and Warehousing

Source: Bureau of Economic Analysis (BEA), Massachusetts Executive Office of Labor and Workforce Development (EOLWD), 51 Employment and Wage (ES-202), BPDA Research Analysis 0.7

0.6

0.5

0.4

0.3

0.2 Millions of Industrial SF Industrial of Millions

0.1

Source: BPDA Pipeline Database, current as of October 1st, 2018, BPDA Research Division Analysis. Number of projects refers to total board actions, counting original approvals and NPCs once each. 52 Square foot totals take the net square footage except for projects outside of the 3-Year rule, where the square footage is counted twice. 0.40

0.35 Innovation Square: 360,000 SF

0.30 Readville Yard 5: 250,000 SF

0.25

0.20

25 Fid Kennedy: 157,000 SF 0.15

Greater Boston Food Bank: 88,500 SF Millions Millions Industrial of Square Footage

E Street Self Storage: 98,000 SF 0.10

0.05

0.00 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Jan - Oct 2018

Recession Permitted Completed

Source: BPDA Pipeline Database, current as of October 1st, 2018, BPDA Research 53 Division Analysis. Square Footage counted as gross of most recently approved project. 3e. • 21 in-patient hospitals with 6,021 beds as of 2017

• 25 neighborhood health clinics

• Most NIH funding of any U.S. city for 23 consecutive years, totaling $1.97 billion in 2017

55 92,887 90,000

Employment in Boston 80,000 hospitals has increased by 70,000

50% since 2001. 60,000 61,801

College and university 50,000 employment has increased by 40,000 35,075 36% over the same time 30,000 25,836 period. 20,000

10,000

Recession Colleges and universities Hospitals

Source: Bureau of Labor Statistics (BLS), Massachusetts Executive Office of Labor and Workforce Development (EOLWD), 56 BPDA Research Division Analysis 165,000

160,000 161,399 full and part time students enrolled in the city’s universities and 155,000 colleges in 2016. 150,000

In 2016: 145,000 • 1,106 dorm beds permitted 140,000 • 624 beds added to existing stock • 2,536 beds under construction or 135,000 soon to be constructed 130,000

125,000

120,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Source: National Center For Education Statistics (NCEC), Integrated Postsecondary Education Data System (IPEDS), Data Center, http://nces.ed.gov/ipeds/datacenter/Default.aspx, BPDA Research 57 Division Analysis 3.1 3 2.9

2.5

2 1.7 1.7 1.6 1.6 1.5 1.2 1.2 1.0 1.1

Millions Institutional Millions Institutional SF 1 0.9 0.9 0.8 0.8 0.7 0.7 0.5 0.5 0.4 0.5 0.3 0.3 0.2

0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Jan - Oct 2018

Source: BPDA Pipeline Database, current as of October 1st, 2018, BPDA Research Division Analysis. Square footage associated with NPCs counted as net change except for projects that were approved 58 more than three years prior, for which total square footage was counted (3-year rule) 2.5

Boston University Student Boston University Student Village: 1.5 million SF Village: 1.5 million SF

2 Harvard Science and Engineering MA Mental Health Center Complex: 557,000 SF Redevelopment: 367,000 SF

1.5 Mass General Hospital Addition: 726,000 SF

1 Millions of SquareFeet Museum of Fine Arts Master Plan: 551,000 SF 0.5

0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Jan - Oct 2018

Recession Permitted Completed

Source BPDA Pipeline Database, current as of October 1st, 2018, BPDA Research Division Analysis. All Square Footage based upon most recently approved gross total. 59 4. 16,000

14,000 13,528 12,886 12,571

12,000 11,435 11,144

10,184 10,000 9,442 9,343 8,679 7,959 8,000 7,715 7,213 7,064 6,611 6,703 6,201 6,055 6,079 6,000 5,590 5,430 5,135 4,900 5,034 4,695 4,627 4,114 4,259 4,094 4,244 4,000 3,525 3,229 2,981 2,504 2,224 2,248 2,183 2,386 2,000 1,186 1,217

0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Jan - Oct 2018 Board Approval Year

Recession Construction Jobs Indirect and Induced Jobs Direct Jobs Source: BPDA Pipeline Database, current as of December 12, 2018, BPDA Research Division Analysis. The job counts associated with NPCs counted as net change except for projects that were approved more than three years prior, for which total number of jobs was counted (3-year rule). The number of jobs were estimated at the time of board approval. For example, developments approved 61 in 2013 are estimated to generate about 11,000 direct jobs when they are completed. $80 $80 $75.5

$70 $70 $62.0 $60 $60 $54.8 $48.7 $50 $50 $46.0 $41.3 $37.8 $38.9 $40 $35.3 $40 $33.2 $30.8 $30.1

Millions 2017$ Millions $30 $30

$20 $16.6 $20

$10 $10

$0 $0 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17

Source: Property Tax Facts & Figures, City of Boston Assessing Department, BPDA Research Division Analysis 62 4.5 4.0 4 3.9

3.5 3.2

3 2.9 2.9

2.5 2.5 Article 80 Projects 2.2 2.0 created a total of 2 3.9 million construction job- 1.5

Millions of Construction Hours Worked Hours Construction of Millions 1.1 hours in 2017 1.0 1 0.8

0.5

0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

The Boston Residents Job Policy (BRJP) mandates that projects over 50,000 square feet and any public development project must comply with the following hiring practices: 1) at least 51% of total work hours of journey people and apprentices must go to Boston residents 2) at least 40% of works hours must go to people of color and 3) at least 12% of work hours must go to women. The data in the chart represent the total number of work hours occurring on projects to which the BJRP applies. 63 Source: Boston Residents Jobs Policy Compliance Reports, BPDA Research Division Analysis. • Since the inception of the linkage program in 1983 through December 2017, the Neighborhood Housing Trust (NHT) has awarded approximately $176.7 million in grant funds, representing 5% of the combined development cost of all assisted projects

• NHT funding contributed to the construction, pending construction, or renovation of 14,467 housing units, of which 12,329 were income restricted

• The Neighborhood Jobs Trust disbursed $2.2 million to job training and education programs in FY2017, helping to equip more than 2,300 low- and moderate- income Boston residents with essential job skills

64 5. South Station 16,000,000 Air Rights, 24.9% 14,000,000 Other 12,000,000 Developments , 40.6% 10,000,000

8,000,000 Boston 6,000,000 University 4,000,000 Student Village, 14.5% Square Feet Approved in 2006 in Approved Feet Square 2,000,000

- 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Calendar Years

Board Approved Under Construction Complete Northeastern Edward W. Brooke Univeristy Residence Charter School on Hall I -- International Massachusetts Olmsted Green, Village, 4.9% General Hospital 8.0% Building 2 Addition, 7.2% 66

BPDA Pipeline Database, current as of October 1st, 2018, BPDA Research Division Analysis. Filene's 16,000,000 Development/One Franklin, 19.0% 14,000,000

12,000,000

10,000,000 Other Developments, Summer Street 49.2% 8,000,000 Hotel, 12.0%

6,000,000

4,000,000

Square ApprovedFeet in 2007 2,000,000

- 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Harvard Science and Engineering Complex, Calendar Years 8.5%

Board Approved Under Construction Complete Waterside Place, 5.9%

Simpson Parcel 1, Bulfinch Triangle, The Victor, 5.5% 67

BPDA Pipeline Database, current as of October 1st, 2018, BPDA Research Division Analysis. Bulfinch Triangle Prudential Center Project, Redevelopment, 16,000,000 9.3% Parcel 24 8.0% Project, 8.5% 14,000,000

12,000,000

10,000,000

8,000,000

6,000,000 Other Developments,

4,000,000 60.2% Square Feet Approved in 2008 in Approved Feet Square 2,000,000 Parcels 1B and - 1C- Bulfinch 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Triangle Calendar Years (formerly ‘The Merano’), 7.9% Board Approved Under Construction Complete Washington Beech Chapter 121A project Phase 1A and 1B, 6.2% 68

BPDA Pipeline Database, current as of October 1st, 2018, BPDA Research Division Analysis. 185 Franklin Street Project, 4.2% Other Developments, The Distillery 10.2% 16,000,000 Redevelopment, 6.7% 14,000,000

12,000,000

10,000,000 Spaulding Fenway Center 8,000,000 Rehabilitation - Phase 1, Hospital, 8.2% 6,000,000 51.0%

4,000,000 Charlesview Square Feet Approved in 2009 in Approved Feet Square 2,000,000 Apartments Project - Third - Amendment, 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 19.8% Calendar Years

Board Approved Under Construction Complete

BPDA Pipeline Database, current as of October 1st, 2018, BPDA Research Division Analysis. 16,000,000 Channel Center - 14,000,000 Second Amendment, 12,000,000 25.2% Other 10,000,000 Developments, 42.4% 8,000,000

6,000,000 157 Berkeley Street, 10.1%

4,000,000 Square Feet Approved in 2010 in Approved Feet Square 2,000,000

- 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Calendar Years

Board Approved Under Construction Complete Massachusetts Mental Health Center 275 Albany Castle Square Redevelopment, 9.4% Street, 4.9% Rehabilitation Project, 8.0% 70

BPDA Pipeline Database, current as of October 1st, 2018, BPDA Research Division Analysis. Pier 4, 18.4% 16,000,000

14,000,000

12,000,000

10,000,000 Other, 39.8% 8,000,000 Copley Place, 14.8% 6,000,000

4,000,000 Square Feet Approved in 2011 in Approved Feet Square 2,000,000 Fenway - Triangle 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Mixed-Use Calendar Years Project, 13.5% 45 Stuart Street, 7.1% Board Approved Under Construction Complete The Viridian, 6.4%

BPDA Pipeline Database, current as of October 1st, 2018, BPDA Research Division Analysis. Board Approved SF in 2012:

Boston Landing (formerly New 16,000,000 Brighton 14,000,000 Landing), 19.0% 12,000,000 Other Developments, 10,000,000 34.5% Millennium 8,000,000 Tower and Burnham 6,000,000 Building,

4,000,000 16.9% Square Feet Approved in 2012 in Approved Feet Square 2,000,000

- One Channel 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Center, 11.6% Calendar Years Georgetowne Ink Block, 7.2% Homes, 10.8% Board Approved Under Construction Complete

BPDA Pipeline Database, current as of October 1st, 2018, BPDA Research Division Analysis. Government 16,000,000 Center Garage Development 14,000,000 Plan, 18.0% 12,000,000

10,000,000 80 Causeway Other 8,000,000 Street- The Boston Developments, Garden, 14.6% 6,000,000 54.7%

4,000,000 Square Feet Approved in 2013 in Approved Feet Square 2,000,000

- 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Christian Calendar Years Science PDA- Belvidere/Dalto Board Approved Under Construction Complete n East , 5.6%

Seaport Square Fenway Point Block L1, 3.6% NPC - The Pierce, 3.6% 73

BPDA Pipeline Database, current as of October 1st, 2018, BPDA Research Division Analysis. Seaport 16,000,000 Square Blocks 14,000,000 B&C, 14.7%

12,000,000 Landmark 10,000,000 Center, 11.8% Other 8,000,000 Developments, 6,000,000 52.5%

4,000,000 Square Feet Approved in 2014 in Approved Feet Square 2,000,000 Pier 4, - 9.8% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Calendar Years Parcel K, 5.7% Board Approved Under Construction Complete 345 Harrison Avenue, 5.5%

BPDA Pipeline Database, current as of October 1st, 2018, BPDA Research Division Analysis. Pier 4 Phase 2, 13.0% 16,000,000

14,000,000 380 Stuart, 12,000,000 8.1%

10,000,000 Whittier 8,000,000 Other Choice, 6.1% Developments, 6,000,000 61.2% Congress

4,000,000 Square, 6.0% Square Feet Approved in 2015 in Approved Feet Square 2,000,000

- 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Calendar Years Seaport Square Block Board Approved Under Construction Complete L2, 5.5%

BPDA Pipeline Database, current as of October 1st, 2018, BPDA Research Division Analysis. Government Center Garage (WP-B1 & WP-B2), 11.0%

16,000,000 South Bay, 14,000,000 7.3% 12,000,000

10,000,000 M Block, 7.1% 8,000,000 Other Washington 6,000,000 Developments, Village, 6.9% 63.2%

4,000,000 Square Feet Approved in 2016 in Approved Feet Square 2,000,000

- Ink Block 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Project - Siena Calendar Years Condominum, 4.6% Board Approved Under Construction Complete

BPDA Pipeline Database, current as of October 1st, 2018, BPDA Research Division Analysis. 16,000,000

14,000,000 Other 12,000,000 Developments, 30.8% 10,000,000 Seaport Square, 46.4% 8,000,000

6,000,000

4,000,000 Square Feet Approved in 2017 in Approved Feet Square 2,000,000 159-201 Washington - Street (St. 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Gabriel's), Calendar Years 3.5% Harrison Board Approved Under Construction Complete Albany Block, Tremont 4.1% Back Bay/South Crossing (P-3), End Gateway 7.1% Project, 8.1% 77

BPDA Pipeline Database, current as of October 1st, 2018, BPDA Research Division Analysis.