Turn to page B1 for Banker & Tradesman’s monthly coverage of all things commercial real estate.
ANNIVERSAR Y RR EE AA LL BY THE NUMBERS
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NM F OA RT M EESST TA A T TE E& &F I FN IANNACNI CA IL A IL N F OI R I OANT SI I ONNC ES I1 N8 C 7 2E
County close-up: Barnstable Spotlight: Hyannis
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Tom Senecal is leading Hoyloke-based PeoplesBank into a future even more dedicated to mutuality than before specifically because mutuality is the bank’s secret weapon.
IN PERSON
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WEEK OF MONDAY, JUNE 27, 2022
COMMERCIAL REAL ESTATE BY THE NUMBERS
PA S S I N G T H E B U C K
1 percent Interest rates have risen 1 percent in the last 60 days for commercial real estate projects. See Steve Adams’ story on this page. Source: Boston Realty Advisors
1,905 The number of units planned across three Greystar-owned developments in Everett. See Cameron Sperance’s story on page B1. Source: Greystar
WILL FED’S MOVE SHUT DOWN
HOUSING PIPELINE?
30 percent Multifamily construction costs are up 30 percent over the last year. See Steve Adams’ story on this page. Source: Boston Realty Advisors
21 The number of stories in a planned apartment tower in Everett. See Cameron Sperance’s story on page B1. Source: City of Everett
7.1 percent The median condominium sale price is up 7.1 percent year-over-year. See Week on the Web on page 2. Source: The Warren Group’s Statistics Module
Rate Hikes Could Lead to Shake Out BY STEVE ADAMS
$3,200 The average per-square-foot sale price for new units at 29 Commonwealth Ave. See Andrew Haigney’s column on page B5. Source: MLS PIN
15.2 percent The median apartment rent is up 15.2 percent statewide over the last year. See Steve Adams’ story on this page. Source: Apartment List
435 The number of units in a Cabot, Cabot & Forbes development under construction in Boston. See Steve Adams’ story on this page. Source: BPDA
Unless otherwise noted, all data is sourced from The Warren Group’s Mortgage Market Share Module, Loan Originator Module, Statistics Module and/or proprietary database. For more information please visit www.thewarrengroup.com/business/ datasolutions.
BANKER & TRADESMAN STAFF
T
he Federal Reserve’s largest interest rate hike in nearly three decades likely will place more hurdles on Greater Boston’s housing production, further constricting new supply and spelling increases in apartment rents and mortgage payments. Developers will face higher borrowing costs and equity requirements, potentially weeding out less experienced and well-
capitalized firms. Others may shift to nonresidential projects, real estate executives predict. “Once interest rates start going up, on the income side, the homeowners are challenged to make the numbers work, and the developer is challenged also,” said Kathy MacNeil, a partner at developer MP Boston. “The fact that we have inflation and construction costs at all-time highs, things are definitely tipped the wrong way.”
Short-Term Confidence
The central bank’s decision to increase the rate that banks charge each other for overnight borrowing by 0.75 percent this month comes after a recent spike in inter-
est rates typically offered by banks for construction and permanent financing of multifamily projects. “Rates have moved 1 percent [higher] in the last 60 days, so that’s having a tremendous effect on the market in both ground-up construction deals and sales of existing product,” said Kevin Benzinger, a director in Boston Realty Advisors’ capital markets group. “Construction costs have moved 30 percent in the last year, and people who have bought land with plans of building a multifamily development are figuring out what to do. Are the rents or prices there to make a project viable now?” Continued on Page 7
COMMERCIAL INTERESTS
FRESH FUNDING
Prices Aren’t Sustainable as Interest Rates Jump Upwards
Team Effort Lands Construction Loan for Boston Food Services Firm
By Scott Van Voorhis | Banker & Tradesman Columnist
By Diane McLaughlin | Banker & Tradesman Staff
Whether Slow or Fast, Mass. Partnerships Push Loan Home Prices Poised to Fall Past Economic Turbulence
Commercial Real Estate PAGE 3
Banking & Lending PAGE 9