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Updated: December 26, 2022 Economic Forecast 2023

Real estate 2023 economic forecast: More development

Photo | Courtesy of UMass Chan medical school Construction workers sign the beam for the topping-off ceremony for the new $325-million research building at UMass Chan Medical School in Worcester.

Real estate money is flowing into Central Massachusetts. Investment firms, large and small, have been growing their portfolios with properties in the region throughout 2022. With many proposed developments starting in 2023, construction companies should see significant work. The office market will be interesting to follow in 2023 as companies work out their strategies for where employees will be located.

Steady improvement downtown

The second half of 2022 has seen a number of companies moving into downtown Worcester. And though notable old businesses like the Owl Shop have left, new restaurants like La Central Bakery and Cafe and Ziggy Bombs have moved into the downtown area. A new art space has opened in the former Elwood Adams Hardware storefront, and Worcester Regional Food Hub has opened a space in the Glass Tower at 446 Main.

The upcoming year will see more of the vacant retail and restaurant space along Main Street get tenants as well as businesses moving into available office space as companies figure out their strategies for moving back into the office.

Blockbuster investment properties

Throughout 2022, Central Massachusetts saw a steady stream of national real estate investment firms paying top dollar for large rental communities and industrial properties throughout MetroWest and Worcester County. There is no sign of this trend letting up in 2023. Developers are still looking for cash for new projects, and companies will continue to take sale leaseback deals to increase their liquid capital. Investment companies will be happy to spend money on reliably leased properties to grow their portfolios.

Shuffling industrial

There are millions of square feet of modern industrial space in the pipeline, and much of it is being built on speculation. As the properties come online, some will be occupied by companies moving into the area, but local companies will likely be seeking to update their facilities. The next year could see a lot of movement between these newer properties and older warehouse space. 

PHOTO | Matt Wright
Polar Park first opened for baseball games in May 2021 and construction on the stadium was fully complete later that year.

Suburban multifamily rental properties

It seems that every few weeks there is a new blockbuster multifamily development planned in Worcester as developers seek to meet a rising demand for apartments and the city seeks to solve a housing crisis. Surrounding communities like Marlborough, Clinton, and Shrewsbury are seeking and receiving proposals for multifamily developments. In 2023, more of these projects will move along in towns and cities surrounding Greater Worcester, as long as residents concerned about traffic and crowding in schools don’t put a stop to them.

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