Boston Business Journal’s 2021 Year in Review
January 2, 2022
Boston Business Journal
By: Boston Business Journal Staff
In a year that was supposed to be when everything got back to normal after the tumult of 2020 — but ended up as a continuation of the upheaval — here are the biggest business stories of 2021 as chosen by our newsroom staff.
Ballot battle over gig workers
Ever since Attorney General Maura Healey sued Uber and Lyft over the status of their drivers in 2020, Massachusetts has became a major battleground in the debate over the rights of so-called “app-based workers” and whether they should be considered contractors or employees.
This year, two local, opposing coalitions were formed to represent both sides of the discussion which centered around benefits such as overtime and sick leave for such workers who drive for a minimum number of hours per week. Several prominent voices — from Sen. Elizabeth Warren to the Massachusetts High Technology Council, plus several elected officials who sponsored bills on Beacon Hill — joined in over the summer and fall. The story will become a central theme of 2022, when a statewide question will likely be on the November ballot which would classify drivers as contractors, and therefore not eligible for benefits afforded full-time employees. Massachusetts is on track to be the second state to face that questions after a similar one passed in California, known as Prop 22, but was then struck down by courts. As California and Massachusetts are often considered benchmarks for new legislation, the outcome of the battle here has big implications for the 57 million gig economy workers across America.
— Lucia Maffei
A record year for companies to go public
Restaurant software maker Toast Inc. and payment tech firm Flywire Corp. are two of the biggest examples of local companies that started trading their stock on public markets this year, which ended up being a record year nationwide for IPOs. More than 50 Massachusetts companies entered the public markets since January, in over 35 initial public offerings (through mid-December) and over 15 deals with special purpose companies, or SPACs. The trend shows no signs of slowing, as tech and life science companies looking for easy access to capital watch the historic rise in the stock market. There are now more than 500 U.S. SPACs looking for targets, and while the resulting equilibrium between SPACs and IPOs in 2022 is yet to be seen, the U.S. Securities and Exchange Commission is already keeping a close eye on blank check companies. Chairman Gary Gensler has asked SEC staff to look into proposals around SPAC’s disclosure requirements, marketing practices and liability for sponsors.
— Lucia Maffei
College enrollment declines
For years, college industry leaders have talked about an upcoming demographic cliff: a decline in local high school graduates who’ll attend area schools, especially in the Northeast. That cliff is still coming, but the pandemic brought problem to the forefront much faster than expected. In fall of 2020, many students delayed their enrollment, and foreign students stayed away. In Massachusetts, enrollment from the fall 2019 semester to fall 2020 fell 2.4%, according to the National Student Clearinghouse. If there’s any silver lining, it’s that the decline in Massachusetts wasn’t as bad as it’s been in other major states for college enrollment, including California and New York. But community college enrollment, often seen as among the best ways to achieve economic equality, has been especially hard-hit, with a 16% drop in the past two years, according to the state.
— Grant Welker
Home prices hit the stratosphere
The Boston area has long been among the most expensive places in the country to buy or rent a home, but the pandemic caused housing prices here — as well as in other pricey metro areas — to reach never-before-seen levels. That was in large part due to inventory levels that hit record lows nationally this past fall, according to Redfin. In October, the median home price in Massachusetts was $500,000 — up from $389,000 two years prior, according to the Warren Group. The statewide median single-family home price in June of $555,000 was the highest ever seen in the Bay State. A seasonal dip since then has cooled prices somewhat, but they remain high enough to catch even sellers and their agents by surprise. The Boston area had at least 50 home sales close in June at $200,000 or more above asking price, the Business Journal reported in July.
— Grant Welker
Longest nurse strike in Mass. history at St. Vincent
When over 700 nurses walked off the job at St. Vincent Hospital in Worcester on March 7, few thought the strike would last more than a few months. But it eventually surpassed 176 days, becoming the state’s longest-ever nursing strike. The two sides agreed on contract language, which added staffing in some key areas of the hospital. However, they then struggled to agree on terms for the nurses to return to work — specifically whether the nurses would be able to go back to their original jobs, many of which had been filled by new hires. Finally after more than nine months, the sides reached a tentative deal in December to allow both old and new nurses to keep their most recent job positions. The deal will bring critical staffing back to St. Vincent, which reduced beds in August to deal with an ongoing staffing crunch. Hospital officials said the beds would come back as soon as there is staff for them. Nurses are scheduled to vote on the contract in January.
— Jessica Bartlett
Health care workers get the jab, or get terminated
As vaccines got to Massachusetts and every other state in December 2020, many health care workers were the first to line up for shots, greeting the medical feat as a miracle amidst the ongoing pandemic. That celebration soon turned to concern, however, as the state’s largest health systems began mandating vaccination as a requirement of employment. Initial surveys indicated as many as 20% of some staff would be reluctant to get a vaccine. Threats of wide-scale layoffs came as hospitals faced a staffing crunch, and just as patient volumes began to rise. In Massachusetts, the fears have largely faded from view, as less than 1% of most workforces ultimately refused a vaccine. While the layoffs worsened the ongoing staffing crisis, hospitals were ultimately able to weather the storm. As 2021 comes to a close, one unresolved issue is whether mandates to receive booster shots will spur any similar drama.
— Jessica Bartlett
Businesses reopen as pandemic continues
It may seem a thousand Covid-19 news cycles ago, but it was just this past spring that the Massachusetts economy fully reopened after many businesses were forced to close their doors because of the virus in the spring of 2020. Gov. Charlie Baker lifted all Covid-related limits on businesses beginning Memorial Day weekend, allowing employers like bars and nightclubs to welcome in customers for the first time in more than a year. Businesses have remained fully open since — even as the emergence of the delta and now omicron variants has kept some customers at home and brought the return of mask mandates in Boston and elsewhere. In some ways, the state economy has recovered from its 2020 low points, including in terms of gross state product. But as of November, the unemployment rate was still double what it was in early 2020, and employers are contending with inflation and serious hiring problems tied to the pandemic.
— Greg Ryan
Merger mania hits Boston banking
Greater Boston’s banking sector was on fire with merger activity in 2021, remaking the competitive landscape. Eastern Bank and Rockland Trust both crossed the $20 billion asset threshold by acquiring Century Bank and East Boston Savings Bank, respectively. The duo are now the largest independent Massachusetts-based banks by a large margin. Eastern is suddenly drawing close to East Coast giant TD Bank in terms of local market share. The year also saw out-of-town players seek to bulk up their Boston operations. Silicon Valley Bank bought Boston Private Financial Holdings Inc., a deal that drew vocal opposition from an activist Boston Private investor but that ultimately went through. Buffalo-based M&T Bank agreed to acquire People’s United Bank, which would make it one of the state’s 10 largest deposit holders. There may be more fireworks to come in 2022, with M&A-friendly Rockland Trust still on the prowl and Eastern just over a year removed from its $1.8 billion initial public offerings.
— Greg Ryan
The rise and fall of Biogen’s Alzheimer’s drug
Biogen Inc. made history in June when the U.S. Food and Drug Administration approved what was expected to be a blockbuster drug. As one of the few treatments for Alzheimer’s disease, and the first in over a decade, Aduhelm held significant promise not only for patients, but for investors, who boosted the company’s share price by more than 50% when it was approved in June. But uncertainty around Aduhelm’s efficacy, as well as hesitancy by doctors to prescribe the drug and by insurers to cover it, have dampened those expectations. What was originally supposed to be a breakthrough for the Cambridge biotech has become a sinking anchor. While the Centers for Medicare and Medicaid Services have yet to decide whether public insurance will cover Aduhelm, several major private insurer have so far declined to cover it. Meanwhile, the Office of the Inspector General has opened an investigation into potentially improper relationships between FDA staffers and Biogen executives during the approval process. The drug only garnered a measly $300,000 in sales in the third quarter of this year, and the company has lost nearly half of its market capitalization since Aduhelm’s approval.
— Rowan Walrath
City, state confront climate change
In a year that saw a global climate conference bring renewed urgency to the field of clean energy, Boston and Massachusetts remained at the forefront of the field. Legislation proposed on Beacon Hill could bring an infusion of $750 million to clean energy investment in the state. A new Boston City Council plan will require large buildings to cut emissions significantly by 2030. And the nascent offshore wind industry continued to expand with big promises about how it can change New England. Innovators at clean and green tech startups here had a big year too, raising collective billions as they develop everything from electric vehicle charging that comes to you to super-insulating inserts for windows. In 2022, a big political player will entrench himself in the clean energy space, as former Somerville mayor Joe Curtatone takes over as president of the Northeast Clean Energy Council. “This is the future of our economy, healthcare, education, transportation,” Curtatone said this fall. “It touches every aspect of how we live, work, play and raise a family.”
— Sam Mintz
Return to the office, but only partly
Many landlords, real estate brokers, business owners and more in Greater Boston had big hopes for 2021 bringing a full-bore return to the office. That didn’t turn out to be the case. Many offices, while still technically open, are hardly at their pre-pandemic levels of activity, and downtown streets are still relatively quiet. Now brokers say they’re “looking closely” to see whether the variants impact companies’ stated plans to return to the office in January 2022, said Lauren Vecchione, senior vice president on the urban brokerage team for Colliers International in Boston.
“Boston is behind in comparison to other major cities on return to office,” Vecchione said at a recent NAIOP market forecast.
Landlords such as Boston Properties, Synergy Investments and Oxford Properties are reporting office occupancy at 9% to 20% on Mondays and Fridays, while Tuesday through Thursday office occupancy ranges from 16% to 44%, Vecchione said. The same goes for suburban office. But there are hopeful signs. Sublease space — at record or near-record highs for much of 2020 and into this year — has pulled back. And several major tenants have committed to big leases, including Eaton Vance moving its headquarters to One Post Office Square and Wellington Management renewing and expanding its existing 524,000-square-foot lease.
— Catherine Carlock
Labs dominate development
Life-science lab space again dominated the region’s real-estate development world in 2021, with a huge wave of proposed new labs and conversions of offices into labs from Malden to Boston’s Fenway and almost everywhere in between. There’s 15 million square feet of lab space under construction or being converted now, with another 11 million square feet permitted, and demand from life-science companies has hit an all-time high of 6.2 million square feet, said David Townsend, executive managing director for real estate brokerage Newmark, at a recent NAIOP overview.
“There’s really good demand across the spectrum and types of companies, both from big pharma and early- to mid-stage life-science companies,” Townsend said.
A big driving force is life-science venture capital investment in Massachusetts hit $9 billion this year, up from $7 billion in 2020 and more than double 2019 levels. “That is, in a nutshell, what is driving our world, and leading to the intense demand we’re seeing, and limited supply,” Townsend said.