By: Demetrios Salpoglou
When General Electric, the nation’s largest industrial company, announced it was moving its corporate headquarters to Boston early last year, the real estate community had stars in its eyes.
GE’s move from Fairfield, CT to the Seaport proved a major win for the development community that has spent nearly a decade revitalizing the area using the moniker the “Innovation District” to lure businesses and residents alike. For many, the move was proof that Boston could compete with the likes of Manhattan and San Jose.
Meanwhile, residential real estate brokers are giving each other high fives. GE is slated to bring 800 jobs to its new headquarters, 200 of which are corporate staff and the remainder are so-called “digital industrial product managers, designers, and developers.” These Fortune 500 execs are highly paid and will need somewhere to live.So where will these big-wigs call home?
We suspect that some will stick around the Seaport. Some may start off by renting at luxury apartment complexes like Pier 4, VIA and The Benjamin (the latter two began leasing in 2017 as part of the Seaport Square development). Those looking to jump right into home ownership might opt for swank condos a Twenty Two Liberty or 319 A Street – two new luxury development projects.
Others, though, might find that the Seaport is too much of a shiny penny and they want to live in neighborhoods that are more well-established and have a more authentic feel and charm. Back Bay, the North End and the South End are all good options for this crowd, with the South End being in closest proximity to the Seaport District. Here, condos at places like the Sepia have recently hit the market and will offer buyers a boatload of amenities.
With all of the high-end units recently developed or currently under construction, there’s no doubt the downtown market will be bustling with activity thanks to GE’s move. But let’s not forget that not everyone wants to live downtown. After all, GE is moving from a wealthy suburban enclave (Fairfield County is one of the wealthiest in the nation), so relocating employees might not take to city life.
That’s why we’re expecting an uptick in sales in the inner suburbs like Weston, Wellesley, Brookline and Newton. Many of the employees GE is bringing to Boston are mid-career professionals with families and will want to settle down in an area with great school districts, which all of these neighborhoods provide.
These homes won’t go without competition, though. Bidding wars won’t be uncommon. It’s amazing what can happen when you plunk a few hundred high-paid execs into the market at the same time. Just look back at what happened when IBM built a new campus off I-495. With a lack of product on the market nearby, new developments like The Point have popped up. Zoning restrictions in Boston’s western suburbs limits development potential so we expect the sale of existing homes to hit record highs.
In fact, we suspect many GE employees moving to Boston will engage in transactions in both the city and suburbs that top $1 million.
Real estate brokers are already trying to get a piece of the pie. There have been reports of agents reaching out to GE directly, with GE referring them to its relocation consultants.
What’s the time horizon for this predicted uptick in sales? Certainly some GE employees will begin looking immediately. About 100 employees have already moved into GE’s temporary offices on Farnsworth Street. Others might wait to move up to Boston until GE opens its permanent headquarters in 2018. In any event, residential real estate surrounding the future headquarters should remain hot for the next few years in anticipation of the final build out.
Just when we thought Greater Boston’s luxury real estate market couldn’t get any hotter—it’s about to!
If you’re sitting on a house that will be appealing to a GE employee, it might not be a bad time to consider listing so you can get in on the action. Conversely, if you’re a landlord in the area, consider working with a broker to conduct targeted outreach to GE’s tech employees moving to the area. The Boston rental market is already incredibly strong, but there’s still room for upward growth among the city’s most sought-after units.