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A Publication of The Warren Group GROWING PAINS
SIGNS OF SATURATION
More Housing Needed To Sustain Economic Growth
BANKS BECOME WARY OF DEVELOPMENT
Regional Chambers Of Commerce Identify Opportunities BY JIM MORRISON BANKER & TRADESMAN STAFF
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xperts agree: Massachusetts needs to build more housing in a hurry, but the mechanisms for doing so aren’t in place. Developable land close to the city is scarce. Proposed projects of any significant size in the suburbs are often met with fierce opposition by residents who fear their schools and other services will be overwhelmed. Efforts at the state level to force cities and towns to zone for multifamily housing have also met with strong opposition. At least two large Chambers of Commerce outside of Boston think they might be able to convince the communities they serve to capitalize on the state’s need for more housing to benefit their regions and the state economy. A recent Massachusetts Housing Partnership (MHP) study found that since 2010 Massachusetts had added about 246,000
Requirements On Construction Loans Rise
Continued on Page 8
BY STEVE ADAMS | BANKER & TRADESMAN STAFF
COMMERCIAL INTERESTS
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Turns Out Tech Expansions Don’t Benefit Everyone ‘Winner-Take-All Urbanism’ Guts The Middle- And Working-Class Photo by Cassidy Murphy | Banker & Tradesman Staff
ommercial real estate valuations have hit all-time highs nationally and Greater Boston is in the midst of a massive multifamily building boom skewed toward high-end properties, raising concerns about future risks. Nearly a third of banks have tightened standards on development and construction loans, according to a recent Federal Reserve survey of senior loan officers. Over 36 percent say they’ve raised requirements for multifamily loans. “The community bank is really scared about commercial real estate risk in general,” said Justin Bakst, director of capital market analytics for CoStar. “The biggest risks that are on bankers’ minds are multifamily supply risk in the tier one markets, such as Boston and New York, and the luxury sector.” Multifamily valuations are now 33 percent higher than they were before the housing collapse in 2008, according to CoStar research. Another 850,000 units are scheduled to be delivered nationwide by 2020, with high-end properties in pricey markets comprising half of the total. In Greater Boston, apartment deliveries hit their highest levels in more than three decades in 2015 with more than 8,000 new units. Nearly 8,000 more are scheduled for completion during 2017. Continued on Page 9
Berkshire Group’s Benjamin tower hit the market last week; another 478 apartments are set to come online at its sibling property, The Via, later this month.
CONTENTS
In Person ������������������������������������������������������������������ 7
Insurance ��������������������������������������������������������������� 10
Points ����������������������������������������������������������������������� 4
Residential ��������������������������������������������������������������� 8
Classified Sections ������������������������������������������������� 11
By The Numbers ������������������������������������������������������� 6
Commercial & Industrial ������������������������������������������ 9
Records Section ������������������������������������������������������ B1
BY SCOTT VAN VOORHIS BANKER & TRADESMAN COLUMNIST
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lot of cities across the world would kill for the influx of tech and biotech giants and startups that have made Greater Boston one of the most affluent places on the planet. But in a trend that is happening in other wealthy tech cities across the country, giants and startups alike are increasing going urban as they target Cambridge and now downtown Boston and the fast growing Seaport/Innovation District. And that is raising alarm bells with, of all people, economist Richard Florida. The urban development guru made a name for Continued on Page 3