Organizations and Events Industry Leaders Discuss State of CRE at Inaugural HPMG Event

by Mike Hoban

On Sept. 20, High-Profile Media Group (HPMG) held its first-ever panel discussion, Trends Impacting Commercial Real Estate, at the newly-opened Winthrop Center in Boston, the largest Passive Housecertified office building in the world. The discussion was moderated by Anastasia Barnes, owner and CEO of HPMG, and featured an all-women panel that included Kathleen MacNeil, principal at MP Boston; Marci Griffith Loeber, managing principal at Griffith Properties; and Amanda Strong, director of asset management at MIT Investment Management Company (MITIMCo). The panel shared their thoughts on a variety of topics, including the effect that the stalled return to the office is having on the CRE market, challenges with incorporating energy efficiency and resilience measures into buildings in the face of a warming planet, and what the future holds for the industry.

Griffith Loeber cited the “debt markets and the lack of liquidity” as the biggest hurdle facing the industry in Boston today and noted that it has only worsened as the year has gone on. Lenders are postponing lending decisions until 2024, “and that’s a big problem if you’re trying to buy or refinance something,” she said.

Strong agreed, stating that the liquidity crisis has negatively impacted MITIMCo’s life science and office portfolios. “In the past, when smaller life science companies got a capital infusion, they would be quick to lease up new space and expand and hire more employees,” she said. “But because of the unknowns of the market, I think people are just being more conservative.” Like most office owners, Strong is waiting for the return to the office to gain momentum and believes that people will eventually want to come back, particularly to buildings rich in amenities and food options.

Griffith Loeber said she is seeing signs of increased occupancy in suburban properties. “The parking lots are fuller, but it’s definitely a tale of two buildings. If you have the amenities and a nicer building, they tend to fare better,” she said. “I think the younger generation doesn’t know what they’re missing, and it’s exciting to see more and more companies mandate coming back and actually enforcing it.”

MacNeil expressed concern about the fate of the office market, particularly with loans coming due for building owners and tenants either failing to renew or downsizing their office space. “But it’s not all doom and gloom,” she said. “I think that there could be some great opportunities… there is still an amazing demand for residential, and that’s not going away. We are just too supply-constrained.”

Despite the headwinds, the panelists remained optimistic about the future of the CRE market. “It’s going to be difficult in the next several years, but there’s going to be some wonderful opportunities,” MacNeil emphasized. “We made it through 9/11…we made it through COVID, and we made it through the supply chain issues. We will make it through this next challenge and come out with new and innovative ideas… and it’s going to be exciting.”

Mike Hoban covers AEC and real estate industry news in New England.