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www.bankerandtradesman.com
WEEK OF MONDAY, FEBRUARY 22, 2016
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A Publication of The Warren Group COMMERCIAL INTERESTS
CHANGING CAMBRIDGE
Say Goodbye To Spec Custom Corporate Campuses Go Up In The Suburbs
H
High Profile HQs
Launched in the waning days of the last boom, a spate of new flagship buildings and campuses came online between 2008 and 2010, after which activity dropped off, according to JLL. But that quiet period is long gone now. TripAdvisor is settling into its new 282,000-square-foot headquarters along Route 128 in Needham, complete with a salt water fish tank, a lounge with craft beer and a hip fitness center. Not alone, Clark’s Shoes, Wolverine, Vistaprint and Thermo Fisher Scientific have all recently moved into new, specially built quarters along 128, or are in the process of doing so. They join Green Mountain Coffee, which had a new research and development center built for its Keurig Division in Burlington, and life science giant Shire, which is expanding Continued on Page 3
Back-And-Forth In The Lending Landscape Competition For Talented LOs Sharpens Between Banks And Nondepositories
BY SCOTT VAN VOORHIS BANKER & TRADESMAN COLUMNIST
ello custom-built corporate campus, goodbye spec development. The spec suburban office building or tower increasingly seems to be a thing of the past as companies turn to build-to-suits to create exactly the kind of environment to attract the best and brightest. More than a few years into what is proving to be an historic building boom, the Boston area is seeing a growing number of new flagship buildings and campuses built for SCOTT VAN VOORHIS various tech, life science and other fast-growing companies. But what we are not seeing is a bevy of proposals for new speculative office towers in Boston or new, from the ground up, spec suburban buildings by developers. For a growing number of hot-shot companies, the control that a build-to-suit gives over everything from work environment to future expansion is trumping cost. “They get a chance to control their own culture and control the environment for their employees who are so highly sought after today,” said Matt Daniels, managing director and suburban team leader at JLL. The trend can be most clearly seen at work in the suburbs, especially along the red-hot 128 corridor, where rents are rising, vacant space is dwindling and buildto-suit projects are starting to multiply. The rise in build-to-suit activity comes after a lull of a couple years as the real estate market on 128 and across Greater Boston caught its breath in the aftermath of the Great Recession.
JUMPING SHIP?
INNOVATION IN AN OLD INDUSTRY New Players Disrupt The Cambridge Real Estate Market BY JIM MORRISON | BANKER & TRADESMAN STAFF
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ompetition in the $1.5-billion Cambridge real estate market is heating up as sale prices continue to soar. Recently, a few companies have opened new offices, poached some top agents and made it clear they’re targeting the high end of the market. For more than a decade, two companies have dominated in Cambridge: Coldwell Banker and Hammond Residential Real Estate. Between 2005 and 2015, Coldwell Banker’s two offices averaged a 35 percent market share and Hammond averaged 16 percent, according to MLS data. Now, experienced newcomers like Gibson Sotheby’s International and Compass Real Estate are hoping to change that. Gibson’s Cambridge office opened in the middle of 2015 and managed to capture 2.6 percent of the market share. Robert Paul opened two Cambridge offices at the end of 2014 and had 1.9 percent market share in 2015. Compass opened very late in 2015 and had no sales in that year. Jeff Heighton, regional vice president at Compass Real Estate, opened the Cambridge office at 1 Mifflin Place at the beginning of this year with one of Hammond Real Estate’s former top-producing teams, John Petrowsky and Christian Jones. Recruiting top agents is a hallmark of the venture capital-backed, technologybased real estate platform. “Compass’ value proposition resonated with them right out of the gate,” Heighton said. “We focus on recruiting the top 15 percent of agents and they are at the top of the list. Our view is if you hire the best agents, other agents of that caliber will be interested. I’d prefer to have a couple more like John and Christian than an office full of 30 or 40 people.” Tod Beaty, owner of the Cambridge and Belmont Hammond offices, has lost a dozen agents so far to Compass and Gibson. He thinks those agents will find their work harder now, not easier. “They may be paying the agents better, but they’re not serving them better,” Beaty said. “We’ll see how the business goes. There will be more change in the market. I don’t really think it will be Continued on Page 8
CONTENTS Points ����������������������������������������������������������������������� 4
Banking & Lending �������������������������������������������������� 9
By The Numbers ������������������������������������������������������� 6
Commercial & Industrial ���������������������������������������� 10
In Person ������������������������������������������������������������������ 7
Classified Sections ������������������������������������������������� 11
Residential �������������������������������������������������������������� 8
Records Section ������������������������������������������������������ B1
BY LAURA ALIX BANKER & TRADESMAN STAFF
T
he mortgage business may be tougher than ever, but the increasing age of loan officers has upped competition for talent and some say that new rules around how those loan originators may be compensated has granted an unfair advantage to nonbank mortgage lenders. You know the story: After the Great Recession, regulators cracked down on what they deemed abusive lending practices, in part by crafting new rules around how loan officers can be compensated. In particular, regulation prohibits loan officers from being compensated based on the terms of a loan. And when the Consumer Financial Protection Bureau was created, it fast took up the reins and has not hesitated to smack down firms both large and small for crossing a line. But with consumer confidence on the mend and interest rates still near historic lows, there is still business to be had. While Massachusetts has no shortage of banks to make mortgages, nondepository institutions have certainly given their banking competitors a run for their money. For instance, Guaranteed Rate, which was nowhere on the scene in 2011, captured the top position in purchase market share in the Bay State last year. “Everybody’s looking for mortgage loan officers and the nondepository institutions are very aggressive,” said Scott Auen, senior vice president of retail lending at Southbridge Savings Bank. Adding that Southbridge Savings lost some of its own staff to a nondepository mortgage lender last year, he said, “It’s consistent that for a community bank to compete, if they have a good loan officer, they need to have a very competitive compensation plan or you will lose that loan officer – and typically to a nondepository institution.” But Shant Banosian, branch manager and senior vice president of mortgage lending at Guaranteed Rate, doesn’t see it quite that way. While of course his firm is doing everything it can to recruit talented loan officers, he said he doesn’t often see those loan officers flocking to nondepository mortgage lenders from the banking side of the business. “I find that you’ll see people from the nondepository side going to the bank side occasionally, but you very rarely see the guys come over from the bank side,” he said. “The people in the nondepository side typically have to get their business Continued on Page 9