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Boston Area Retail Market Report for Q2 2020


Its unclear when or if the state will open further before the end of the summer. It’s clear that is the biggest question facing the Boston retail market at the end of Q2 2020. If the state opens, losses in terms of sales could be light, restaurants and apparel retail stores likely excepted. If it drags on, losses and forced sales could be widespread and severe.

Right now, at the end of July entering August, according to CoStar data, retail sales are mostly at a standstill.

Prior to the pandemic, sales volume in Boston was similar to most metros — volume had peaked and was trending downward. However, investors did not necessarily see that as a weakness in the market, as purchases were made and properties being held by long-term investors such as REITs, and not private equity funds with finite hold periods. Prices were also at an all-time high, and few Owners wanted to sell, feeling it would be difficult to find an investment with the same return.

On the leasing side, hits are already being taken. ent growth rate following Q2 is at negative 1.9 percent. Rent losses due to the pandemic are expected to exceed the National Index, too, but experts say that certain retail clusters may be able to weather the storm with the right mix, such as retail near apartment development areas, which would increase residential spending potential, and office construction would provide a boost the daytime population of certain areas.

Grocery and liquor stores are seeing growth, though, with credit card spending at supermarkets areas up 5 percent, according to the New York Times, and alcohol sales up 25 percent. Online grocers sales are up 75 percent. Current forecasts by CoStar data indicate retail will likely bottom out in early-to-mid 2021 but recover quickly to pre-pandemic levels by 2022.

Information provided by CoStar.com

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