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2016 ANNUAL PROPERTY TRANSFERS DIRECTORY Call 617.896.5388 or email datasolutions@thewarrengroup.com Est ab li s h e d 1 8 7 2
the
financial
www.bankerandtradesman.com
WEEK OF MONDAY, JANUARY 16, 2017
services
and
real
estate
weekly
for
massachusetts
A Publication of The Warren Group A WHOLE NEW WORLD
Rising Rates, Rising Risk Business Intelligence And Data Analytics Can Help ID Risk In New Rate Environment BY LAURA ALIX BANKER & TRADESMAN STAFF
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egulators have had their eye on credit risk for some time, but with several rate increases forecast for 2017, bankers may do well to invest in business intelligence and data analytics tools to better mitigate that risk and root out fraud in a rising rate environment. The story, by now, should sound familiar: The prolonged low interest rate environment, combined with tightening regulations on residential mortgage lending, has led many banks to “reach for yield” on the commercial side of the house. One only need listen to quarterly earnings calls to hear bankers talk in vaguely ominous tones about the loosening of covenants and high loan-tovalue ratios. The OCC recently raised the issue in its latest Semiannual Risk Perspective, pointing to growth in commercial real estate and easing of underwriting standards and highlighting the need for conContinued on Page 10 A NEW PROGRAM
FHFA’s Flex Mod Is Unfair, Opaque, Say Consumer Advocates
BOSTON’S LOSS, SUBURBS’ GAIN
INDUSTRIAL TENANTS
SHIFT GEARS
Displacement, Steady Demand Drives Absorption Outside City BY STEVE ADAMS | BANKER & TRADESMAN STAFF
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ife science manufacturing expansion, e-commerce companies’ growing distribution space requirements and urban manufacturers that are displaced by development in Boston are driving industrial vacancies down and rents up in Greater Boston. Industrial vacancies fell to 6.8 percent at the end of 2016, according to Boston-based Encompass Real Estate Strategies. It’s the lowest level in at least 15 years, reflecting redevelopment of industrial parcels into other uses and demand from e-commerce companies for distribution space near population centers. In Boston, industrial users are increasingly being displaced by multifamily developments, especially near transit stops. The latest large-scale proposal calls for 521 housing units and a 150-seat restaurant at 36-40 and 50-70 Sprague St. at an industrial park in Readville. Boston developer Abbey Group’s acquisition of the 6-acre Boston Flower Exchange property in the South End could replace the wholesale hub with tech offices, labs and housing. And Catamount Management Corp. plans 177 housing units at 480 Rutherford Ave. as part of its continuing redevelopment of the 20-
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dvocates are concerned a new program designed to replace the Federal Housing Administration’s Home Affordable Modification Program, which expired at the end of last year, is unfair, inconsistent and lacks transparency. Beginning Oct. 1, 2017, homeowners who are delinquent on loans backed by Fannie Mae and Freddie Mac can consult with their mortgage servicer to see if they qualify for a modification of the terms of that loan under the Federal Housing Finance Agency’s (FHFA) Flex Modification program. Lenders may voluntarily use the program as soon as March 1, 2017. To be eligible, the loan must be a convenContinued on Page 8
acre former Hood Dairy site. “Ultimately, the companies that are going to stay behind have to be in Boston proper for access to their customers: trash transfer stations or school bus yards or uses like that,” said Michael Dalton, an executive director at Cushman & Wakefield. “Some of these are starting to push into Chelsea and Everett.” Even in Everett, industrial users face rising land prices stemming from the proximity to the $2 billion Wynn Boston Harbor casino. Unimproved industrial land without permits in Everett has sold for as high as $2.2 million per acre in recent weeks, Dalton said, as investors bet on demand continuing to spill over. More big industrial sites close to downtown are on developers’ radar, including South Boston’s Widett Circle and the Dorchester Avenue corridor between Broadway and Andrew Square. “Route 128 towns are becoming part of the urban fabric when it comes to industrial properties, because it’s radiating out,” said Steve Clancy, a partner at CBRE/New England. “Companies in Chelsea want to go to Peabody, and companies from South Boston end Continued on Page 9
INDUSTRIAL MARKET SUMMARY - ALL SUBTYPES Current Quarter
Prior Quarter
Year Ago Period
225.8M
225.8M
225.4M
7.8%
7.9%
8.7%
678,278
1,229,109
937,899
$7.86
$7.84
$7.72
Under Construction (SF)
863,200
584,900
1,152,000
Deliveries (SF)
384,900
680,000
0
Total Inventory (SF)
HAMP’s Replacement Lets Banks Hold All The Cards BY JIM MORRISON BANKER & TRADESMAN STAFF
The first phase of AmeriCann’s 1-million-square-foot Massachusetts Medical Cannabis Center in Freetown will contain 130,000 square feet for cultivation and processing and 30,000 square feet of R&D space.
Vacancy Rate Qtr. Net Absorption (SF) Average Asking Rent
12 Month Forecast
Source: Newmark Grubb Knight Frank
CONTENTS
Residential �������������������������������������������������������������� 8
Records Section ������������������������������������������������������ B1
Points ����������������������������������������������������������������������� 4
Commercial & Industrial ������������������������������������������ 9
SUPPLEMENT
By The Numbers ������������������������������������������������������� 6
Banking & Lending ������������������������������������������������ 10
THE PROFESSIONAL
In Person ������������������������������������������������������������������ 7
Classified Sections ������������������������������������������������� 11
A Publication of the Associated Subcontractors of Massachusetts, Inc.