Development land is always in demand.
Something is always being built, and something else is either being
torn down or transformed. What
was in demand in 1990 was different from what was in demand in 1950.
And what is in demand in 2014 is different from what was in demand in
either of those earlier times.
At the peak of the demand scale in 2014 is multi-family land.
Multi-family land is in demand not only in Boston’s upper-income
neighborhoods and inner suburbs but also at suburban “smart growth” sites
next to subway and commuter rail stops.
Demand is so strong that developers turn to locations that are not
even zoned for apartments – office and industrial parks – where the
availability of large parcels and the ability to override zoning (so long as
projects include affordable units) make multi-family construction legal and
Medical land is in strong demand.
An aging population needs places to maintain its health.
But not all locations make for a successful medical office building
or clinic. Success in real
estate is defined by rent and price.
A location near a hospital is a strong prerequisite.
Development Land Demand Trends, 2014
in the middle
recreational building land
drug store land
religious facility land
biotech lab land
golf course land
Land for recreational buildings is in demand.
Fitness centers, gymnastics schools, and indoor soccer and lacrosse
“fields” absorb either empty space in high-ceilinged older buildings or new
Restaurants are in demand. The
American population gets an ever-increasing proportion of its food from
restaurants. That means more
dollars spent in restaurants, more people employed in restaurants, and more
restaurants. In the city, those
restaurants occupy older storefronts.
In the suburbs, they create a demand for “pad sites” in front of
shopping centers and along through roads, the sites filling up with
buildings for national chains.
Banks fill up sites in the same strips as restaurants.
Bank branches prefer sites for free-standing buildings.
Drug store land is in demand. If
the neighborhood in a radius around a site has enough spendable dollars and
if the site can produce what the store wants in terms of traffic, access,
and the land for parking and the store, a CVS or a Walgreen’s may pay a
price for the site that bears little resemblance to the prevailing price per
square foot of land for other nearby development sites – sometimes, double
or triple the going rate.
Dunkin’ Donuts land is in demand.
Dunkin’ Donuts can fill two and sometimes three sites in the same
strip. We just can’t get enough
The same for storage space. We
are drowning in our own stuff.
Our stuff creates demand for mini-storage land.
Schools are on the rise. New
schools need new locations. Old
schools and colleges tend to spread, amoeba-like, absorbing adjacent vacant
To make the list complete: land for car dealerships, biotech labs (at
limited locations), and hotels.
All those are in demand.
For every use that is on the rise, another is in decline.
Some are on the edge: neither up nor down.
Retail is in the latter category.
The end of the recession brought expectations of a retail resurgence.
But stagnant incomes and the effect of online shopping weigh as
heavily as the positive forces.
Some retail is up, and some is substantially down.
All that can be seen in a simple graphic.
The graphics for 1950 and 1990 would have looked different.
The graphic for Greater Boston in 2014 accompanies this text.
Eric T. Reenstierna, MAI