Banker & Tradesman: Oct. 14, 2019

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THE FINANCIAL SERVICES AND REAL ESTATE WEEKLY FOR MASSACHUSETTS

BY THE NUMBERS

PAGE 6

County close-up: Berkshire Spotlight: Sheffield

Andy Posner was working on a master’s degree in environmental studies at Brown University when the Great Recession started. He began hearing about high-interest lending practices and families spending as much on financial services as they did on food.

IN PERSON

PAGE 8

WEEK OF MONDAY, OCTOBER 14, 2019

BANKING & LENDING

BY THE NUMBERS

18 The number of fintechs Citizens Bank works with. See Diane McLaughlin’s story on page 9.

Source: Lamont Young

$41B QUESTION

IS THERE A LIFE AFTER

WEWORK?

20 percent The share of The Capital Good Fund’s borrowers who don’t have a credit score at intake. See In Person on page 8.

Source: Andy Posner

21.83 percent The share of the Berkshire County mortgage market controlled by Greylock Federal Credit Union.

See By the Numbers on page 6.

Source: The Warren Group’s Marketshare Module

$10,000 The first-place prize at Citizens Bank’s recent fintech “hackathon.” See Diane McLaughlin’s story on page 9.

Source: Citizens Bank

Company’s Troubles a Test for Flex Office Space Model

BY STEVE ADAMS BANKER & TRADESMAN STAFF

W

eWork has carved out a pervasive presence in the local office market occupying over 1.7 million square feet at 19 properties in downtown Boston and Cambridge.

As the specter of bankruptcy hovers over the coworking giant, the potential closure of its trendy shared workspace hubs would free up new availabilities in office submarkets that currently have a shortage of sizeable space blocks. But a WeWork departure coupled with a broader economic downturn could have a more dramatic effect on the market down the road, real estate researchers predict.

“The downtown market is tight and if they were to close a couple of locations,

we have the demand for space [from other companies],” said Elizabeth Berthelette, research director at brokerage Newmark Knight Frank in Boston. “We’ve been hearing rumblings that landlords are taking a step back if they’re in early negotiations with them. The biggest impact is what won’t be moving forward.”

WeWork is the dominant coworking player in Boston, comprising 3.2 percent of tenancy across the 72 million-square-foot Continued on Page 7

$2 million The mortgage, from Village Bank, on a $5.5 million condominium in the One Dalton tower. See the Gossip Report on page 9.

Source: The Warren Group

1,650 The number of borrowers who took advantage of a new MassHousing down payment assistance program.

See Mounzer Aylouche’s column on page 5.

Source: MassHousing

4,200 The number of loans nonprofit The Capital Good Fund has made to creditimpaired borrowers. See In Person on page 8.

Source: Andy Posner

2 Academy Mortgage Corp.’s Jamie Pollard is the second-most productive loan originator in Berkshire County this year. See By the Numbers on page 6.

Source: The Warren Group’s Loan Originator Module

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.

WeWork occupies nearly 760,000 square feet in nine buildings in Boston’s Financial District including 33 Arch St. and 1 Lincoln St.

COMMERCIAL INTERESTS

S E R V I C E I N N O VAT I O N S

BPDA Elimination Could Make Housing Crisis Worse

Fintech Not Just for Consumer Experiences, Anymore

By Scott Van Voorhis | Banker & Tradesman Columnist

By Diane McLaughlin | Banker & Tradesman Staff

Wu Misses Mark with With Demand Shifts, Business Solution to BPDA’s Problems Banking Moves Toward the Future

Commercial Real Estate PAGE 3

Banking & Lending PAGE 9

2 | BANKER & TRADESMAN

OCTOBER 14, 2019

The Week on the Web

Timothy M. Warren Jr., CEO and Publisher David B. Lovins, President and COO

BANKER & TRADESMAN

A ROUNDUP OF OUR MOST POPULAR STORIES FROM THE PAST WEEK

Published by The Warren Group

CENTURY BANCORP ANNOUNCES RECORD EARNINGS IN Q3

ESTABLISHED 1872

PUBLISHING

Associate Publisher: Cassidy Norton Managing Editor: James Sanna Associate Editor, Commercial Real Estate: Steve Adams Associate Editor, Banking: Diane McLaughlin Contributing Writer: Scott Van Voorhis

• Third quarter net income of $10.08 million at Century Bank’s parent company increased 5.2 percent compared to net income of $9.58 million for the same period a year ago.

• Total assets increased 2.6 percent from $5.16 billion at the end of 2018 to $5.30 billion on Sept. 30.

• A 2.3 percent increase in net interest income for the period is primarily due to an increase in average earning assets, according to Century.

• Non-performing assets totaled $1.1 million at the end of last month, compared to $3.5 million at Dec. 31, and $3.7 million at Sept. 30 last year, thanks to the resolution of one residential real estate property during the third quarter of 2019.

BOSTON OFFICE TOWER SOLD FOR $806M

Audience Solution Specialist: Sarah Ahlgren

CARGURUS EXPANSION COULD JUMPSTART BACK BAY DEVELOPMENT

Client Services Assistant: Victor Salvo Advertising Account Manager: Steve Ketler Graphic Designer: William Samatis

DATA SOLUTIONS

Director of Sales & Marketing: John Bottini Communications Manager: Mike Breed Executive Data Solutions Account Manager: William Visconti Data Solutions Account Managers: Chris Mirakian, Peter Sullivan RE Records Search Client Specialist: Jenell James

INFORMATION SERVICES

Director of Operations & Product Strategy: Samantha Bullock Data Operations Supervisor: Tammy Dandurant Data Vendor Coordinator: Tracey Kelley Data Quality Auditor: Ellen Gendron Acquisitions Coordinator: Linda MacDonald Transaction Acquisition Coordinator: Wally Bullock

INFORMATION TECHNOLOGY

• Online vehicle marketplace CarGurus is in negotiations with Bostonbased Samuels & Assoc. to occupy the bulk of the 1001 Boylston St. office tower, according to multiple real estate sources.

• The 20-story, 450,000-square-foot building is planned for the Massachusetts Department of Transportation’s Parcel 12, located above the Massachusetts Turnpike at the end of Newbury and Boylston streets. Along with a smaller hotel-condo tower, the building would flank a new pedestrian plaza and elevated terrace overlooking the Turnpike.

• Marketing materials from CBRE New England, which represents ownership in leasing, tout the office building’s multiple outdoor terraces and “iconic” branding opportunities including a rooftop logo visible to the 140,000 vehicles traveling daily on the Turnpike.

Senior Applications Developer: Joe Chan

HARVARD AND SAMUELS EYE NEW WESTERN AVE. PROJECT

Software Developers: Michael Paul, Mark Wearsch

• Samuels & Assoc. and Harvard have assembled a group of parcels steps from Samuels’ Continuum apartment complex at Barry’s Corner, which opened in 2015, and the university’s 900,000-square-foot new Science and Engineering Complex, which is scheduled for completion in 2020.

• The two partners are preparing to submit a multifamily housing and retail proposal to the Boston Planning and Development Agency • The neighborhood’s current zoning prohibits housing as-of right and has a floor area ratio of 1.0, but rezoning for higher density and building heights could be approved in early 2020.

FINANCE & ADMINISTRATION

Controller: Gena Salvo Accounts Payable: Olga Khalaydovsky Human Resources Manager: Linnea Blair Office Manager: Nicole Tower

• Boston-based Rockpoint acquired the 1.1 million-square-foot 100 Summer St. for $806 million from Blackstone Group, its second large purchase downtown this fall. Wells Fargo Bank provided a $470 million mortgage.

• After the departure of major tenants including law firm Nixon Peabody and tech security firm Rapid7, 100 Summer has rebounded with leases by Cambridge biotech company Ironwood Pharmaceuticals, coworking giant WeWork and its rival Industrious.

• Newmark Knight Frank’s Boston-based capital markets team represented the seller and arranged financing.

• Recent upgrades include a new lobby and amenity center, which contributed to 600,000 square feet in leasing activity in the past three years.

ASKING PRICE ON BRADY-BUNDCHEN MANSION DROPS $5.6M

• The mansion owned by local power couple Tom Brady and Gisele Bundchen went from $39.5 million to $33.9 million late last week, according to MLS PIN. • Beth Dickerson of Gibson Sotheby’s International Real Estate has the listing.

• The New York Post reported July 31 that Brady and Bundchen, who own a home in Tribeca in New York City, have been househunting in Connecticut and New Jersey this summer.

HERE’S WHAT YOUR PEERS WERE INTERESTED IN LAST WEEK: BANKE R & TR AD ESMA N

1

Former Executive Assistant Agrees to Plead Guilty to Bank Fraud, Embezzlement

2

South End Office Building Sells for $13.75M

3

Asking Price on Brady-Bundchen Mansion Drops $5.6M

4

Edwards’ ZBA Reform Plan Could Paralyze Housing Construction

5

CLF Will Sue MassDOT Over ‘Short-Sighted’ Removal of I-93 HOV Lane

6

Ana Botín joins Santander boards

(ISSN 0005-5409)

Volume 200, Number 42 Published each Monday. ©2019 The Warren Group Inc., 2 Corporation Way, Suite 250, Peabody, MA 01960. All rights reserved.

No part of this publication may be reproduced without the written consent of the publisher.

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POSTMASTER: Send address changes to: Banker & Tradesman The Warren Group 2 Corporation Way, Suite 250, Peabody, MA 01960 Phone: 617-428-5100. Fax: 617-428-5119. www.bankerandtradesman.com Periodicals postage paid at Boston, MA

7

Downtown Worcester to Get 5K SF ‘Black Box’ Performance Space

8

A Tiny Target is Coming to Downtown Boston

9

Century Bancorp Announces Record Earnings in Q3

10

Replace Cape Cod Bridges, Army Corps of Engineers Says

POLL RESULTS No Banker & Tradesman reader is satisfied with the current state of data privacy regulation.

Should Beacon Hill be writing state-specific data privacy laws?

Some certainty for banks 50% Yes. is better than no certainty.

This will give community 33% Yes. banks a greater voice.

This will only lead to con17% No. fusion with other states’ laws.

The current system is 0% No. good enough.

OCTOBER 14, 2019

BANKER & TRADESMAN | 3

COMMERCIAL REAL ESTATE COMMERCIAL INTERESTS

Wu Misses Mark with Solution to BPDA’s Problems BPDA Elimination Could Make Housing Crisis Worse

BY SCOTT VAN VOORHIS BANKER & TRADESMAN COLUMNIST

H

ere we go again.

Boston City councilor and apparent mayoral wannabe Michelle Wu has kicked off her notquite-official-yet campaign with a classic move, calling for the abolition of the decades-old Boston agency that vets new development projects.

It follows the blueprint laid out by other mayoral candidates over the years, including the current incumbent, Marty Walsh, who campaigned on a similar platform, albeit to reform, not axe, the agency.

And like so many critics past and present, Wu, in a 54-page report issued last week, blasted the Boston Planning & Development Agency as an anachronism left over from the 1950s, when the city was a decaying backwater. Instead, Wu would like to see Boston replace the BPDA with a planning board and a planning department more directly accountable to elected officials.

But maybe it’s not the BPDA that is locked

in a time warp, but rather the critics of that Boston agency everyone loves to hate, of which Wu is just the latest in a long line.

To read Wu’s report, you would think today’s BPDA is simply a warmed-over version of the neighborhood-demolishing behemoth the leveled the old West End in the 1950s.

The first 10 pages or so rehash the many sins and misdeeds of the agency, previously known as the Boston Redevelopment Authority.

Wu not only condemns leveling of the West End, today widely recognized as a tragedy, but also, oddly enough, the Prudential Center project, which replaced rail yards with what is today the Back Bay’s thriving commercial centerpiece.

The then-BRA’s decision to greenlight the massive project “had lasting impacts,” Wu notes, accurately, before she veers off the rails with a rather odd assessment that the agency was wrong in “prioritizing one big-name project at the expense of coherent and democratic citywide planning.”

Could it be possible, that at a time when Boston was still a dingy, declining backwater, with a reputation for ferocious political corruption, focusing on one, big transformative project wasn’t such a bad idea – especially given the results?

More than one powerhungry mayor has used the agency to hold sway over development in Boston in neardictatorial fashion.

The Boston Planning & Development Agency has a too-cozy relationship with prominent developers, but it also has enabled Boston to build far more housing than its suburban neighbors.

In the early years, the agency provided a buffer between a city known for its rampant political corruption – epitomized by Mayor Michael Curly, the king of graft, who spent five months of his fourth term in the federal slammer for mail fraud – and major investors and corporations interested in development opportunities, but fearful of getting shaken down.

For all its faults, Boston’s quasi-independent development agency played a crucial role in fostering a boom that catapulted the city from a corruption-riddled backwater back into the front ranks of the world’s great urban metropolises.

Over the past five decades, tens of billions of dollars in new towers, parks, labs and entirely new neighborhoods have taken shape across the city.

It’s not that Wu’s report doesn’t have any good ideas – her report is chock full of suggestions that would make the city’s development arm both function more effectively and be more transparent as well.

Boston could certainly use more as-of-right zoning, removing the need for the BPDA to roll out special “planning development areas” every time a developer proposes a new project.

Wu also nails it when she describes the way the agency’s independence has, over the years, created “unwritten rules” that only a few, privileged builders understood – an unhealthy breeding ground for backroom deals and sometimes even outright corruption.

More than one power-hungry mayor has used the agency to hold sway over development in Boston in near-dictatorial fashion.

Continued on Page 10

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4 | BANKER & TRADESMAN

OCTOBER 14, 2019

OPINION EDITORIAL

EDITORIAL CARTOON

Construction Costs, Not Profits Drive Affordability Crunch

D

espite how much Boston’s two leading politicians might wish it to be so, luxury product’s large share of the housing units built in recent years cannot be blamed on a caricature of “the greedy developer.”

City Councilor At-Large Michelle Wu issued a 72page indictment last Monday of the city’s independent planning agency and its land-use policies, blasting developers for building large amounts of luxury housing and the Boston Planning & Development Agency for letting it happen.

Mayor Marty Walsh took his own swipe at commercial developers and investors a few days later, accusing them of forgetting the social cost of too much luxury building and blaming them for putting profit above the common good.

Both Wu and Walsh, experienced with land use issues, should know better. For many traditional developers, market-rate housing is the only thing that’s practical to build.

An iron triangle governs development costs: Land, labor and materials. Developer profit comes in a distant fourth when ranking the contributions to a unit’s cost.

Estimates by CBRE’s Boston multifamily team, calculated for Banker & Tradesman, show just how high those costs are today.

A contemporary triple-decker costs between $295,000 and $385,000 per unit to build, when hard costs, soft costs, profit and land are factored in. A 4-story building with an elevator costs between $310,000 and $400,000 per unit. A 5-story building with a concrete or steel podium – the most common type of large multifamily building – costs between $390,000 and $500,000 per unit.

While they don’t solely govern prices set in response to market conditions, these costs create a floor below which prices can’t practically be driven. And they can’t simply be wished away.

And with Low-Income Housing Tax Credits and other affordable housing financing tools in short supply, the only other way to substantially lower a building’s overall cost per unit is to break that iron triangle.

Absent a state-run steel mill or massive pay cuts for the state’s hard-working construction workforce, land is the easiest leg to influence.

The Walsh administration has done good work in this regard, working to free up around 3 million square feet of city-owned land for development and in many cases prioritizing affordable developers when doling it out.

The other way to help bring land prices down is to massively increase supply. In fact, a bill sits on Beacon Hill awaiting action from the legislature as you read this that would go some way toward boosting the number of developable sites in Boston’s suburbs.

Gov. Charlie Baker’s Act to Promote Housing Choice, supported by both the commercial real estate industry and the association representing the state’s municipalities, would lower the threshold for zoning votes required by most multifamily projects from a two-thirds supermajority to a simple majority vote. While it would not, as some more aggressive legislators want, mandate multifamily zoning in areas around transit stops or in town centers, it would pave the way for progressive towns to rezone for density and others to spot-zone new projects.

With Greater Boston nearly 100,000 homes short of demand today, further delays on this issue are unconscionable no matter NIMBY rumblings against the bill.

Banker & Tradesman Cassidy Norton

Associate Publisher c n o r to n @th e w a r r e n gr ou p . c om

Timothy M. Warren Jr.

Publisher T i m o t h y M. W a r r e n

Publisher 1975-1988 Keith F. Warren

Publisher 1928-1975 W i l l a r d C. W a r r e n

Publisher 1901-1928

THE HOUSING SCENE

The Anatomy of a Real Estate Email Scam Criminals Take Millions Every Year Impersonating Counterparties in Transactions

BY LEW SICHELMAN SPECIAL TO BANKER & TRADESMAN

T

he request Aaron Cole received, via email, to wire $123,000 to close on his new home certainly looked legit. It wasn’t, though, and in the click of a mouse, his money was gone.

It was a scam, and the criminals responsible quickly whisked the money to various accounts in the United States and overseas.

Cole’s story has a happy ending, but many others lose big-time in what is becoming a booming niche: online real estate fraud.

‘I Knew My Money Was Gone’

Cole, a vice president of a gear and machine company in Oregon City, Oregon, had sold his old home and was ready to move with his wife and two children into a new place.

But that happy occasion turned into a nightmare when he had to tell his wife their closing money had vanished.

“I never felt like that before in my life, and I hope I never feel like that again,” he said.

“The scammer got between my correspondence with the title company and me,” he said. The thief sent Cole false wiring instructions, which, “to my untrained eye, looked to be from the same people I’d been working with all along.”

By the time the legit title company called a week later with the actual wiring instructions, he recalls, “I knew my money was gone and there was very little chance of ever recovering any of it.”

Luckily his title company, WFG National Title in New York City, made Cole whole, allowing him to close on his home and move in just in time for Christmas. In return, he has been telling his story to media outlets to warn consumers about the dangers of real estate “phishing” scams.

According to Bruce Phillips, senior vice president and chief information security officer at WFG, this kind of electronic wire fraud is all too prevalent.

“We see a lot of attempted wire fraud,” he said. “We see one almost every day.”

These con artists scammers are clever, too, honing their techniques constantly.

“When we change something, they change something back,” Phillips said. “It’s almost like an arms race.”

In all, wire fraud has registered a year-over-year increase in losses of about 85-90 percent, he said.

A “spoofed” email is what fooled Cole. That’s when the return email address doesn’t match the real company’s URL. In Cole’s case, the email was from a “mail.com” address, rather than one from WFG Title. It was also a PDF document, which the title company never sends, nor does it send wiring instructions by email.

$150M in Stolen Per Year

A 2018 FBI report on internet crime includes real estate as one of the hot areas for fraudsters, and the numbers are eye-opening. Though the FBI makes a substantial amount of recoveries, more than 11,000 victims of real estate/rental fraud lost $150 million in 2018, making real estate the fourth-largest loss category.

At a recent meeting of mortgage professionals, FBI Special Agent Kyle Armstrong updated those stats, reporting

FBI’S ADVICE TO CONSUMERS • Verify all requests for a change in payment type and/or location. A sudden request for a change in payment method – from check to wire, for example – should arouse suspicion.

• Be wary of any communication that is exclusively email-based. Establish a secondary means of communication for verification purposes.

• Be mindful of phone conversations. One way to counteract fraudulent phone activity is to establish code phrases that would only be known to the two legitimate parties.

• If you discover a fraudulent transfer, time is of the essence. First, the victim must contact their financial institution and request a recall of the funds. Second, they should contact their local FBI office and report the fraudulent transfer. Finally, regardless of dollar loss, a complaint should be filed with the FBI’s Internet Crime Complaint Center (a.k.a. the IC3 unit) at ic3.gov or, for email victims, at bec.ic3.gov. that mortgage scammers fleeced people out of $12 billion last year for an average of $162,000 per incident. And it’s pretty easy money with little or no consequences.

“If you rob a convenience store, you get $700 and 25 years in prison,” Armstrong said. But if you con someone in a real estate transaction, “you end up with $162,000 in Nigeria ... and it’s virtually impossible to prosecute them once the money’s been transferred.”

Fraudsters target a wide array of players in the real estate industry. Besides title firms, they hunt law firms, real estate agents, buyers and sellers. Armstrong said phishing scams directed at real estate pros use sophisticated schemes that are difficult to stop. Email scams – referred to by the FBI as Business Email Compromise (BEC) or Email Account Compromise (EAC) – are definitely booming in the real estate sector, according to the bureau.

“From 2015 to 2017,” it reported, “there was a rise of over 1,100 percent in the number of BEC-EAC victims reporting the real estate transaction angle, and an almost 2,200 percent rise in the reported monetary loss.”

How can your customers protect themselves from falling prey to these clever criminals? There are a couple of obvious steps. If someone they think they know is asking them to wire money, no matter how little, they should call and ask if the request is legit. Also, they should take a close look at the URL the message comes from.

Personal stories like Cole’s make for potent educational tools. WFG’s Phillips now uses Cole’s story to start industry presentations on the topic.

“Nobody thinks it’s going to happen to them, right up to the time it happens to them,” Phillips warns.

Mark Fogarty contributed to this report.

Lew Sichelman has been covering real estate for more than 50 years. He is a regular contributor to numerous shelter magazines and housing and housing-finance industry publications. Readers can contact him at lsichelman@aol.com.

OCTOBER 14, 2019

BANKER & TRADESMAN | 5

OPINION ULI PERSPECTIVES

Regional Solutions to Solve Housing Crisis Should Be Considered Too Many Zoning Decisions Lack Metro-Wide Perspective

BY MANIKKA BOWMAN SPECIAL TO BANKER & TRADESMAN

G

reater Boston is already in the throes of a housing shortage and it is estimated we will need to add more than 200,000 apartments and condos to meet the region’s growing demand. But, while local, regional and state leaders are taking steps to increase the supply of multi-family housing units, significant barriers stand in the way of achieving the goals many have outlined.

According to a June 2019 report commissioned by the Massachusetts Smart Growth Alliance, “while only a few municipalities effectively prohibit multi-family housing from being built altogether, all municipalities highly restrict its development relative to demand.”

In her June 2019 report, “The State of Zoning for New Multifamily Housing in Greater Boston,” researcher Amy Dain reviewed regulations, plans and permits in 100 cities and towns surrounding Boston.

Her report contained four key findings: 1. Very little land in the area is zoned for multifamily housing 2. The region has moved to a system of project-byproject decision-making 3. The most widespread trend in zoning for multifamily housing has been to make it part of a larger, mixed-use development 4. Municipalities are allowing incremental development in historic centers and on the municipal peripheries of their communities. When higher level density is allowed, it’s isolated from public transit, which creates poorly connected edge cities in suburban communities.

Perhaps the biggest takeaway from her research is that municipalities tend to grant zoning relief on a project-byproject basis. Zoning is not necessarily focused on multifamily units, which is why the process of bringing units to market is so slow. Goulston & Storrs Director Matthew Kiefer underscored the point at a recent ULI Housing and Economic Development Council program when he posed the question: “What would it take for Greater Boston to recognize the region is approaching a housing crisis?”

exclusion of the region.”

Speaking at the ULI program, Cambridge Vice Mayor and City Councilwoman Jan Devereux noted the general public’s lack of understanding about the impact of municipal zoning decisions.

“The average community member is not deeply immersed in the nuance of zoning in their community and how it impacts the region,” she said.

The panelists suggested the state can play a role in

Boston is a world-class city with strong economic fundamentals that is now enjoying robust growth. But there is a housing crisis here, and we need to look at many different tools to fix the problem. Maybe it’s finally time to stop building one zoning decision at a time.

The Metropolitan Area Planning Council recently examined permits for multifamily housing issued by 14 cities and towns in the urban core of Metro Boston.

Its data showed Boston has issued permits for nearly 19,000 new housing units since 2015, while the other 13 communities combined issued 10,000 permits. Of those, the majority were zoned and permitted in three communities: Cambridge, Somerville and Quincy. The interior core communities are leading in production, but they can’t solve the region’s housing crisis alone.

The statistics point to the need for a regional approach to multi-family development zoning to eliminate what Kiefer described as “abutters [making] zoning decisions that benefit their immediate needs at the

creating a structure that encourages a regional zoning approach by creating incentives for elected officials to come together, think about broader interests and address the issue of housing density collaboratively.

Boston is a world-class city with strong economic fundamentals that is now enjoying robust growth. It was ranked one of the top 10 markets for investment in the latest ULI/PwC survey. But there is a housing crisis here, and we need to look at many different tools to fix the problem. Maybe it’s finally time to stop building one zoning decision at a time.

Manikka Bowman is director of policy and outreach for ULI Boston/New England.

EQUITY BOOSTER

We Know Down Payment Assistance Works.

Now, We’re Expanding It MassHousing Hopes to Boost Middle-Income Buyer Power in Boston, Gateway Cities

BY MOUNZER AYLOUCHE SPECIAL TO BANKER & TRADESMAN

M

assHousing launched our expansive down payment assistance program early last year on the belief that down payment requirements can create artificial barriers to homeownership, and that by removing those barriers, we could empower first-time homebuyers, expand homeownership opportunities and create new pathways to long-term wealthbuilding.

After more than 18 months in the market, we know that down payment assistance works. When we meet buyers where they are and equip them with the support and tools they need to succeed, we can achieve strong outcomes, for families and communities alike.

Based on the successes we have seen, MassHousing has expanded the agency’s down payment assistance program. MassHousing’s new, enhanced down payment assistance program increases consumer buying power, raises program income limits in targeted communities and broadens the program to include more property types. Together, these changes will make sustainable homeownership possible for more homebuyers, in more communities, across Massachusetts.

MassHousing launched down payment assistance in March 2018, because the agency saw first-time homebuyers struggling to attain homeownership while navigating high rents, student loan debt, and a tight housing market. Our down payment assistance program empowers homebuyers and removes barriers to homeownership by allowing creditworthy, income-eligible first-time homebuyers to finance some or all of their down payment with a 15-year fixed-interest rate second mortgage.

In the program’s first 18 months, MassHousing’s down payment assistance has allowed 1,650 house-

holds to purchase their first home. MassHousing’s down payment assistance program has been an especially powerful tool in addressing the state’s racial homeownership gap. One-third of down payment assistance loans have gone to buyers of color – a rate that is more than twice the statewide average for minority home purchase lending.

In a market characterized by high home prices and low inventory of homes for sale, we are succeeding in connecting buyers to homeownership opportunities and creating wealth, in every region of the commonwealth.

In a market characterized by high home prices and low inventory of homes for sale, we are succeeding in connecting buyers to homeownership opportunities and creating wealth, in every region of the commonwealth. Down payment assistance is driving strong, mission-driven lending in a difficult market.

A Response to Difficult Market

Still, we know the current environment is challenging to many first-time homebuyers. Statewide median home prices have risen 17 percent since down payment assistance launched early last spring. The inventory of homes for sale remains tight. The development market struggles to produce new starter homes. And changes

to Fannie Mae and Freddie Mac pricing have made mortgages significantly more expensive for middleincome households.

In response, MassHousing is expanding our down payment assistance program, to make sustainable homeownership possible for more buyers, in more communities across the state.

Down payment assistance loans will now cover up to $15,000, or 5 percent of a purchase price. Combining a 5 percent down payment assistance loan with a first mortgage covering 95 percent of the purchase price will result in smoother approvals in automated underwriting engines and lower mortgage insurance rates.

MassHousing is also expanding down payment assistance to more property types, including two-, threeand four-family homes.

And the agency is raising income eligibility to 135 percent of the area median income (AMI) for purchases in the city of Boston, and in Gateway Cities.

Households making up to $147,420 can now access down payment assistance when purchasing a home in eastern Massachusetts cities like Everett, Lowell, Salem, Revere, Lynn and Brockton; in Worcester, a household can now earn up to $128,655 and still qualify for down payment assistance. Outside of Boston and the 26 Gateway Cities, income eligibility remains at 100 percent of AMI. Many middle-income buyers who work near Boston currently have difficulty finding homes for sale at attainable prices anywhere near their workplace. Previously, expanding a home search further from the Boston core, where prices remain more accessible, had put buyers over-income for down payment assistance.

Now, higher income limits in targeted communities will deliver greater choices to working families.

As an agency, MassHousing is committed to sustainable homeownership. That means putting buyers in the best position to succeed for the long-term. That is why we are working to significantly boost buying power of middle-income first-time homebuyers – because we understand the importance of sustainable homeownership, to the buyers we serve.

Mounzer Aylouche is vice president of homeownership programs at MassHousing.

6 | BANKER & TRADESMAN

OCTOBER 14, 2019

BY THE NUMBERS COUNTY CLOSE-UP

BERKSHIRE

SPOTLIGHT Sheffield

YEAR SETTLED 1725

Several residents reported seeing a large, spherical UFO visit a local corn field in 1969. One witness, who reported being briefly abducted by the craft along with his family, later created a park on private land to commemorate the incident.

YEAR INCORPORATED 1733 TOTAL AREA 48.6 square miles POPULATION 3,257 DENSITY 69 people per square mile TAX RATES Residential: Commercial:

STATISTICAL SNAPSHOT MEDIAN SALES PRICE

Community

Jan.-Aug. 2019

Change from 2018

SALES VOLUME

TOTAL NUMBER OF HOUSING UNITS 1,965

Jan.-Aug. Change from 2019 2018

Adams

$146,050 2.89% 57 1.79%

Alford

$480,000 8.17%

5 -16.67%

Becket

$229,000 17.44%

35 -5.41%

Cheshire

$180,000 -7.69%

16 -23.81%

Clarksburg

$135,750 2.07%

10 11.11%

Dalton

$188,200 7.39%

52 13.04%

Egremont

$397,500 -12.64%

18

Florida

$150,000 24.42%

Great Barrington

$322,500

Hancock

$210,000 -53.33%

Hinsdale

$261,000 43.41%

22

Lanesboro

$221,000 7.8%

27 -12.9%

$310,000 310000

Lee

$270,000 12.03%

33 -2.94%

$240,000 240000

Lenox

$328,800 9.6% 48 92%

$170,000 170000

Monterey

$740,000 72.09%

-13.31%

20%

3 -25% 46

6.98%

4 -42.86% 0%

5 -70.59%

Mt Washington

N/A

N/A

N/A

N/A

New Ashford

N/A

N/A

N/A

N/A

New Marlboro

$223,750

-36.07%

12

-25%

North Adams

$137,950

-2.99%

60

-23.08%

Otis

$357,500 1.56% 22 -12%

Peru

$240,000 15.94%

Pittsfield

$177,250 6.14% 328 6.84%

Richmond

$266,700 -23.6%

12 -25%

Sandisfield

$240,000 9.59%

6 -40%

Savoy

$222,500 19.56%

6 -14.29%

Sheffield

$335,000 20.83%

26 -7.14%

Stockbridge

$280,000 -10.4%

16 -27.27%

Tyringham

$371,000 -20.9%

6 100%

Washington

N/A

9

0%

$509,000 -2.58%

10 -16.67%

Williamstown

$262,500 -11.39%

38 -20.83%

Windsor

$225,000 -1.73%

Berkshire County

$210,000

“Any time, any time while I was a slave, if one minute’s freedom had been offered to me, and I had been told I must die at the end of that minute, I would have taken it – just to stand one minute on God’s Earth a free woman – I would.”

— Former slave and Sheffield resident Elizabeth Freeman, whose 1781 lawsuit helped end slavery in Massachusetts

MEDIAN SALES PRICES 450000 $450,000 $380,000 380000

$100,000 100000

2010 ’10

2011 ’11

2012 ’12

2013 ’13

2014 ’14

6.73%

7 942

• Statistics based on single-family home sales of $1,000 and above, excluding condominiums and foreclosure deeds • Source: The Warren Group

2016 ’16

2017 ’17

2018 ’18

• Source: The Warren Group

SALE VOLUME

TOP 3 MORTGAGE LENDERS Rank

1000 1000 900 900

800 800

Lender

% of Market Share

1

Greylock Federal 21.83% Credit Union

2

Adams Community Bank

3

Academy Mortgage Corp.

6.72%

13.64%

Rankings and Mortgage Market Share stats include purchase and refinance mortgages for single-family homes through June 2019 Market share percentage based on volume of mortgages • Source: The Warren Group

700 700

TOP 3 LOAN ORIGINATORS

600 600 500 500

2019 ’19

Berkshire Massachusetts

• Graph based on single-family home sales of $1,000 and above, excluding condominiums and foreclosure deeds

75% -2.69%

2015 ’15

• All sales thru August YTD

N/A N/A N/AWest

Stockbridge

$15.50 $15.50

Rank

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 ’10

’11

’12

’13

’14

’15

’16

’17

’18

’19

• All sales thru August YTD

• Graph based on single-family home sales of $1,000 and above, excluding condominiums and foreclosure deeds • Source: The Warren Group

Lender

Organization

1

Erin Carlotto

Greylock Federal Credit Union

2

Jamie Pollard

Academy Mortgage Corp.

3

Kaylin Choquette

Adams Community Bank

Ranked by volume of loans through June 2019 • Source: The Warren Group

TOP 10 EXISTING HOME SALES Street Address Community

Buyer Seller

Date Price

1

317 Long Pond Road Great Barrington

Thomas A. Knox Stephen Bennett

6/20/2019 $1,320,000

2

527 Main Road Monterey

Marcy Pontell John J. Delmolino Jr.

3

170 Gould Road Monterey

4 5

Rank

Street Address Community

Buyer Seller

Date Price

6

4 Cove Lane Stockbridge

Mary C. Winslow Robert L. Daley

7/31/2019 $825,000

7/3/2019 $1,250,000

7

35 Under Mountain Road Lenox

Daniel A. Marko Thomas B. Sherman

8/20/2019 $770,000

Elena L. Green Jane Salamon

7/10/2019 $1,060,000

8

16 Old Stagecoach Road Otis

John A. Culhane Bradley L. Barber

7/12/2019 $740,000

16 Pine Crest Hill Road Egremont

Gillian F. Sporn Pine Crest Hill LLC

8/30/2019 $838,000

9

6 Fern Hill Great Barrington

Debra Minkoff Atindra Mahajan

8/26/2019 $730,000

780 Main St. Williamstown

Haylon NT David H. Barnes

6/28/2019 $835,000

10

434 Lion Hill Road Otis

James G. Shirley III Bennett FT

7/29/2019 $700,000

• Statistics from June 2019 - August 2019 • New Construction Excluded • Source: The Warren Group

Rank

OCTOBER 14, 2019

BANKER & TRADESMAN | 7

COMMERCIAL REAL ESTATE $41B QUESTION

Coworking Model Untested in Recession Continued from Page 1 office market, and it maintained its aggressive growth strategy during the third quarter.

It inked an 87,000-square-foot lease at Manulife’s 200 Berkeley St. in Back Bay, another 106,000 square feet at 75 Arlington St. and 117,000 square feet at 100 Summer St, a tower which was acquired last week by Rockpoint Group for $806 million.

“I don’t see the trend toward flexible office space going away,” said Nancy Muscatello, managing consultant for commercial real estate researchers CoStar in Boston. “But the business model of WeWork gives some landlords pause. The arbitrage of signing a lease at the peak of the market and subleasing it out to people who would normally be working from home or a coffee shop: that model is a little more risky, especially at this point in the cycle.”

WeWork is the dominant coworking player in Boston, comprising 3.2 percent of tenancy across the 72 million-squarefoot office market, and it maintained its aggressive growth strategy during the third quarter.

WeWork currently has its biggest presence in Boston’s Financial District, occupying several high-visibility properties including 33 Arch St. and 1 Beacon St. It has its largest single job hub at Fortis Property Group’s One Lincoln, occupying 250,000 square feet.

But a pair of potential deals at 230 Congress St. and 14 Beacon St. recently fell through, according to a local real estate source, amid increasing leeriness among landlords.

New York-based WeWork is reportedly in negotiations on a $4 billion bailout from SoftBank and J.P. Morgan following the failure its long-awaited IPO which originally sought to raise as much as $47 billion.

CAMBRIDGEPORT

Because WeWork usually leases individual properties through special purpose entities, only a small portion of its rent is guaranteed.

As of June 30, only $5.6 billion of its lease payments were backed by corporate guarantees or letters of credit, according to WeWork’s IPO prospectus. Another $41 billion in rent payments could be at risk in the event of a bankruptcy.

Tenants in WeWork’s enterprise workspace model, which provides dedicated larger spaces to corporations such as ezCater and Puma, might opt to remain in their existing locations and sign direct leases with landlords, researchers predict.

And WeWork would likely try to renegotiate terms with landlords before closing locations, said Peter Conway, a market analyst for CoStar in Boston. That could appeal to landlords as an alternative to converting the openformat, amenities-rich WeWork spaces back into traditional office space.

“A lot of their buildings are class A, top-ofthe-market rents, so they could use their leverage to renegotiate,” Conway said. “It’s very expensive to re-build out a suite for a general office user.”

WEST END

BOSTON

BEACON HILL

BACK BAY

FINANCIAL DISTRICT

CHINATOWN

SEAPORT

WeWork operates 19 locations in Boston and Cambridge, including ten downtown.

Eyes on Market Cycle Timing

Boston has recorded over 1 million square feet of positive office space absorption since January, including Foundation Medicine’s 580,000-square-foot lease at 400 Summer St. in the Seaport District. And rents on some Back Bay trophy properties are topping $100 per square foot on a gross basis for the first time ever, said Aaron Jodka, managing director of client services for Colliers International in Boston.

But there are recent signs that the unusually long commercial real estate growth cycle is close to exhausted, after driving vacancies in Boston’s central business district below 8 percent. During the third quarter, both Boston and Cambridge recorded over 150,000 square feet of negative absorption, according to Colliers data.

“The only time we’ve seen that in the past 20 years was in a recession or coming out of a recession,” Jodka said. “It’s safe to say we’ve reached the peak.”

WeWork occupies nearly 760,000 square feet in eight buildings in Boston’s Financial District including 33 Arch St. and 1 Lincoln St.

Currently, WeWork’s local offices are spread across a wide range of landlords, with Fortis Property Group’s One Lincoln tower having the largest single WeWork location at 250,000 square feet.

A decline in demand from traditional office tenants coupled with declining membership in WeWork locations could deal a double-whammy to the local market. And another 7 million square feet of new Boston office space is scheduled to deliver between 2021 and 2023, depending upon how many developers build on speculation, according to Colliers research.

While an economic downturn typically

means corporate belt-tightening on real estate costs, the increasing acceptance of the coworking model could change the equation, said Jodie Poirier, managing director at CBRE Boston. Many Fortune 100-level companies now seek to locate about 25 percent of their office space in flexible workspaces, which offer cost savings and ability to grow and shrink faster than a traditional office lease.

“Flexibility across the portfolio is here to stay,” Poirier said. “The lack of capital outlay can help keep this an attractive product in a recession.”

Email: sadams@thewarrengroup.com

HOT PROPERTY WHAT: LEO J. MEEHAN SCHOOL OF BUSINESS

Each week, Banker & Tradesman commercial real estate reporter Steve Adams spotlights a commercial real estate property in Massachusetts notable for its high deal activity, unique design or one-of-a-kind special features.

WHERE: STONEHILL COLLEGE, EASTON OWNER: STONEHILL COLLEGE BUILT: 2018-2019

• Construction company Bond has completed the $35 million Leo J. Meehan School of Business building at Stonehill College in Easton.

• The 3-story, 63,450-square-foot structure at the center of the campus quad is equipped with cutting-edge technologies, adaptive, modern classrooms and collaboration spaces.

• The project was supported by a $10 million donation from Leo J. Meehan, a Stonehill graduate and CEO of W.B. Mason Co., along with W.B. Mason partners Steven and John Greene.

• Bond previously built the college’s Thomas and Donna May School of Arts & Sciences, Shields Science Center and renovations and expansion of the Sally Blair Ames Sports Complex.

THEY SAID IT:

“We strived to diminish any disruption and produce an environmentally-responsible learning establishment. The Meehan School of Business building will bring business learning to another level on an already bustling and vibrant campus.”

— Dan Ramos, director of operations, Bond’s building division

THINK YOUR PROPERTY IS HOT? Drop Steve a line at sadams@thewarrengroup.com

8 | BANKER & TRADESMAN

OCTOBER 14, 2019

IN PERSON

Investing in People Through Personal Finance

Q: Why did you establish The Capital Good Fund?

A:

It was a confluence of factors. I moved to Rhode Island in 2007 for grad school at Brown, and I got interested in financing mechanisms for energy efficiency. I don’t have a background in financial services, so I was really interested in how a financial product enabled someone to afford making a home more efficient. Two other things happened around this time. One, of course, was that the financial system collapsed, and the other one was that I learned about Muhammad Yunus who won the 2006 Nobel Peace Prize and is considered the father of microfinance.

As I started looking into the financial collapse, I saw that there really wasn’t anyone offering an equitable alternative to high-interest products. That was the impetus for starting the organization in February of 2009 and then when I graduated in May, I decided to give it a try to see if it would have momentum. And 10 years later, we’re one of the fastest growing nonprofit lenders in the country.

Q: What loan products do you offer in Massachusetts?

A:

We began lending in Massachusetts in early 2016. It’s definitely a wealthier state than Rhode Island or Florida, which means that we do a lot of our larger loans. We do energy efficiency loans of up to $25,000 in the state. This year we have already done $600,000 of those in Massachusetts. The flip side is that housing is expensive, and as a result, we see a lot of people struggling with housing. We do a lot of loans for security deposits and catching up on rent or utilities.

Q: How is your organization funded?

A:

In some ways we’re a very traditional nonprofit, and then a couple ways, we’re not at all. On the operating side, about 60 percent of our funding last year came from traditional grants and donations – including JP Morgan, Citizens Bank and HarborOne Bank – as well as community foundations, individuals and the U.S. Treasury, which has a grant program for organizations like ours. At the same time, we also charge interest on our loans, and last year 35 percent of our expenditures were covered by earned income. Our goal is to get that to 100 percent by 2024.

In terms of the money that we lend, we borrow it predominantly from financial institutions.

They lend us that money, and we lend it out. As it gets paid back, we lend it out again. One thing that’s unique is we actually enable people to invest in us. Individuals, businesses, foundations and family offices can lend us money and earn a decent rate of return and, of course, have the impact of our making those loans directly to low-income folks in various communities.

Q: How do you decide who will receive a loan?

A:

Because the people that we lend to have bad credit – the average FICO is 580 and 20 percent of our borrowers don’t have a FICO score at intake – we obviously can’t base our underwriting on credit. Instead, it’s very sound, basic relationship-building underwriting with a slight twist. The first thing that we do is an ability-to-pay test, where we just make sure that when you subtract expenses from income, there’s enough liquidity to cover loan payments. The second factor and the most important one is banking history. What we’ve found is that even if people have no or poor credit, if they manage their bank account well, if they tend to have a good balance in there, then when we go to pull the loan payments, the payments will go through.

ANDY POSNER Title: Founder and CEO, The Capital Good Fund Age: 34 Industry experience: 10 years

BY DIANE MCLAUGHLIN BANKER & TRADESMAN STAFF

A

ndy Posner was working on a master’s degree in environmental studies at Brown University when the Great Recession started. He began hearing about high-interest lending practices and families spending as much on financial services as they did on food. During his final semester, Posner established The Capital Good Fund, a U.S. Treasury-certified community development financial institution offering personal loans ranging from $300 to $25,000 to people with low and moderate incomes, at much lower annual interest rates than the payday lending industry. Ten years later, the nonprofit lender has administered 4,200 loans for a total of $8.8 million to residents of Massachusetts, Florida, Delaware and Rhode Island.

People are not poor because they don’t know how to manage their money, but because they don’t have enough money to manage. … We inculcate that philosophy and that knowledge into our staff, and it drives how we interact with our customers, how we treat them, how we design our products and services.

Q: After getting a loan, do your customers move to traditional banking products?

A:

One of the most important impacts that we have is we report all loan payments made by our borrowers to all three credit bureaus. Because 96 percent of our loans are paid off on time, 96 percent of our clients see an increase in their credit, and that increase averages 75 to 90 points depending on the product. As people build their credit, increase their savings and improve financially, they become more bankable and can start to take advantage of other products that financial institutions offer.

Q: What have you learned over the past 10 years at The Capital Good Fund?

A: My biggest insight has been that people are not poor because they don’t know how to manage their money, but because they don’t have enough money to manage. Not having grown up poor myself and living in a country that really stigmatizes poverty, it took me awhile to realize that. Once you realize that, it really informs how you do everything. We inculcate that philosophy and that knowledge into our staff, and it drives how we interact with our customers, how we treat them, how we design our products and services.

Another insight – and this one might sound obvious – but it’s really hard to do good. If you’re trying to solve an issue like a $200 billion predatory industry, there’s a reason no one’s really done anything about it, because it’s not easy to solve. But more specifically, it’s not that one can’t solve it sustainably in its scale, but that doing so isn’t as profitable as people would normally expect.

POSNER’S FIVE FAVORITE LEISURE ACTIVITIES:

1

Spending time with his wife, infant son and beagle

2

Climate change activism

3

Bicycle road racing

4

Writing poems and essays

5

Reading history, science and psychology books

OCTOBER 14, 2019

BANKER & TRADESMAN | 9

BANKING & LENDING S E R V I C E I N N O VAT I O N S

With Demand Shifts, Business Banking Moves Toward the Future Fintech Not Just for Consumer Experiences, Anymore Bank. He has seen a resurgence of small businesses in recent years, and each one might have BANKER & TRADESMAN STAFF different needs and expectations from the bank. rom large corporations to startups and One challenge is having the resources to bricks and mortar stores, companies are listen to each business owner and address looking to banks for products and serunique needs, Campanelli said. Needham vices that help ease the way they do business.

Bank will build new products as well as partTo meet that demand, banks are turning to ner with fintechs if their products meet their fintechs and even input from the public to recustomers’ needs. invent their services.

To address the needs of Millennial business “Whether you are a mid-corporate or comowners, Needham Bank also works with Babmercial client, or you son College to better are a consumer, you understand what they want your experiences might expect from bankwith your bank to be as ing relationships. Camfrictionless as your expanelli said the bank has periences with all the also brought in younger brands that you actuworkers to ensure the ally interact with,” said employee base has difLamont Young, head of ferent perspectives. digital at Citizens FiChris Tremont, exnancial Group. ecutive vice president Just as online shopof virtual banking, said ping and mobile apps Boston-based Radius have transformed how Bank decided several people interact with busiyears ago to partner with – Joe Campanelli, nesses, businesses themfintechs to improve their CEO, Needham Bank selves want their operacustomers’ experiences. tions to benefit from the The digital bank also same conveniences brought on by technology, provides a white label platform for fintechs to including with their banking relationships. develop their own products, and this year partnered with California-based Brex to help the Business’ Needs in Flux fintech roll out a new business banking product.

Small business owners are looking to comWellesley native Michael Tannenbaum is munity banks to bring more convenience to the chief financial officer for Brex. He said banking, said Joe Campanelli, CEO of Needham the new banking product gives customers one

BY DIANE MCLAUGHLIN

F

“If you’re doing something today the same way you did it five years ago, chances are you’re doing it wrong. It’s about taking what’s worked for the last 120 years and changing and improving what we can do better.”

With business customers of all sizes demanding frictionless experiences from their lenders, banks are having to rethink their business banking operations.

system to manage all business payment methods. The company already offers a corporate credit card with rewards points, and customers can now earn points for their ACH and wire transactions.

Tannenbaum said the product has resonated with business owners who want to eliminate manual processes and save time when making payments. Brex started offering the service to existing customers and already has thousands of people on the waiting list, Tannenbaum said.

fintechs and tech enthusiasts together to work on “the future of money,” as the event was billed.

“These types of events really will foster getting to know the fintechs, attracting some local talent, and really educating people that the banking industry is changing,” said Michael Ruttledge, Citizens’ CIO and head of technologies. “We’re transforming the banks – our physical footprint – at the same time we’re transitioning to digital. How we marry them is really important.”

Young, who heads Citizens’ fintech accelerator relationships, said hackathons provide an opportunity to hear fresh perspectives from outside the bank. Citizens both builds products internally and partners with fintechs, when possible, to avoid having to “reinvent the wheel,” he said. Citizens works with 18 fintech companies and expects to add a few more before year’s end.

Search for Ideas in New Places

In the race to improve its banking products, including its business banking products, Citizens Bank has turned to “hackathons” – part recruiting event, part opportunity to find new fintech partners.

Held in Boston’s Seaport District during the weekend of Oct. 4-6, the bank’s most recent hackathon brought university students,

Continued on Page 10

GOSSIP REPORT 1

NANTUCKET

4

Address: 22 Nonantum Ave., Nantucket Price: $7,100,000 Buyer: 22N LLC Seller: Nonantum 22 RT Agent: South Shore Sotheby’s International Realty Size: 8,021 square feet on 1.5 acres Sold: 9/30/2019

2,3

Built in 2003 and added onto in 2015, the top home in this week’s Gossip Report boasts quality craftsmanship and modern, high-end amenities. The five-bedroom seaside retreat is complimented with a pool, two-bedroom guesthouse and curving stone pathways set into a lush lawn.

1,5 2

BOSTON

Address: 1 Dalton St. #3403, Boston Price: $5,700,000 Buyer: Elizabeth Mullaney and Stephen Mullaney Seller: 1 Dalton Owner LLC Agent: Tracy Campion, Campion & Co. Size: 2,226 square feet Sold: 9/27/2019

3

BOSTON

Address: 1 Dalton St. #3903, Boston Price: $5,500,000 Buyer: Eugenia Romm and Lev Romm Seller: 1 Dalton Owner LLC Agent: Tracy Campion, Campion & Co. Size: 2,226 square feet Sold: 9/27/2019

4

NEWTON

Address: 219 Chestnut St., Newton Price: $5,500,000 Buyer: 219 Chestnut RT Seller: 219 Chestnut Street LLC Size: 7,709 square feet on 1.38 acres Sold: 10/01/2019

5

NANTUCKET

Address: 25 Hussey St., Nantucket Price: $4,925,000 Buyer: 19 Union Street NT Seller: 25ACK101 T Agent: Fisher Real Estate Size: 3,936 square feet on 0.32 acres Sold: 9/30/2019

10 | BANKER & TRADESMAN

OCTOBER 14, 2019

Kendall Square Businesses Team Up to Attack Traffic

Photo courtesy of Citizens Bank

S

Citizens Challenge 2019 “hackathon” winners pose with Citizens Bank executives and judges following the Oct. 4-6 event. The bank has turned to events like these to both recruit new tech talent and find new fintech partners.

Business Banking Clients Demand Different Experience Continued from Page 9 Frédéric Chanfrau, CIO for Citizens’ commercial bank, said the hackathon also provided the bank with a recruiting platform, as Citizens plans to hire more engineers in the future.

One of the ideas that came out of the hackathon was a way for bankers to monitor business customers in real time. Using the example of a restaurant, a group of students identified ways to notify the bank of online reviews and reservations, while also tracking the restaurant’s daily financial activity.

Chanfrau said this type of service would help bankers understand potential issues within a business ahead of time, giving bankers opportunities to identify corrective actions early on.

The fintech i2Chain won a $10,000 firstplace prize for developing a security product, an issue critical to banking business relationships, that protects business documents.

Customer expectations are driving the future of banking, Young said.

“Never in the history of commerce has the customer been more in control – that stands for both our consumer clients who have individual personal relationships with the bank as well as our commercial clients,” he said. “The client being more in control means that as an organization we have to be more nimble to react to what the clients are actually looking for from an experience standpoint.”

Just as banks have had to adapt consumer experiences to new realities, lenders have to realize their business customers’ demands are changing, too, said Needham Bank’s Campanelli.

“If you’re doing something today the same way you did it five years ago, chances are you’re doing it wrong,” he said. “It’s about taking what’s worked for the last 120 years and changing and improving what we can do better.”

ome of Kendall Square’s biggest employers are taking action to find solutions to the traffic problems that bedevil the neighborhood, and the Boston area more generally.

The Kendall Square Association has convened 18 of the area’s top employers representing 18,000 Massachusetts workers, thanks in part to a $150,000 grant from the Barr Foundation, as part of its Transportation ADVANCE initiative and charged them with creating three to six data-driven experiments and running pilots to find strategies that can be scaled up.

“This isn’t about solving Kendall’s problems,” KSA President C.A. Webb said in a statement. “Together we will identify thoughtful solutions which make commutes easier and more enjoyable for workers across the commonwealth in the short term, while we continue our work advocating for long-term solutions to our transportation crisis.”

Representatives of the companies involved will meet for the next 18 months to develop and pick pilot projects and review their outcomes. Some ideas under consideration include “creative parking strategies to incentivize more trips on transit,” “new approaches to carpooling” and infrastructure improvements like dedicated bus lanes, although it is not clear whether these improvements would be confined only to the Kendall Square area.

In its announcement of the plan, the KSA promised data from the pilot projects will be shared with employers across the state to help

them start transportation projects of their own.

As one of the region’s largest concentrations of businesses and largely dependent on one subway line, Kendall Square faces significant transportation challenges, which were made even worse by a summer Red Line derailment that disrupted service on the line for months. A survey of the state’s biotech workers – whose jobs are concentrated in Kendall Square, the Seaport District and the northwest suburbs of Boston – released in September by the Massachusetts Biotechnology Council found most commuted at least 45 minutes to work, and their commutes were getting worse.

For those that rely on public transportation, 79 percent were late for work due to delays on public transportation in August, 69 percent were late for personal commitments after work and 61 percent had public transportation service break down at least once.

Transportation problems are hurting employers’ ability to attract and retain talent. The MassBio survey found 60 percent of respondents would change jobs for a better commute and 23 percent have even considered moving to a different state for a better commute.

Among commuter rail riders, that figure was 76 percent. Biotech workers surveyed also want action from government: 82 percent of respondents did not think the state government was doing enough to improve transportation systems, and 64 percent said they are likely or very likely to support increased taxes or fees to fix the transportation systems.

Email: dmclaughlin@thewarrengroup.com

The Boston Planning & Development Agency provides a buffer between NIMBY-dominated neighborhood politics and projects that add much-needed housing to the city, a buffer which would be hard to replace if the agency were abolished.

BPDA Independence a Double-Edged Sword Continued from Page 3 “The BPDA gives concentrated control over development to the mayor of Boston with little to no accountability, giving well-connected developers outsized access to influence decisionmaking and incentivizing an unhealthy political interdependence,” Wu notes.

Image courtesy of Google Maps.

An Electoral Weapon Only?

Downtown Crossing Office Building Sold to Qatari Buyer

A

n 11-story downtown Boston office building has sold for $70.35 million, according to documents filed with the Suffolk Registry of Deeds.

Built in 1910, 99 Chauncy St. contains 108,106 square feet of class B space, according to city property records. It was most recently assessed at $22 million.

The buyer was a Delaware company, 99 Chauncy Street Inc., with a Doha, Qatar address listed as care of Alduwaliya Asset Management, an investment firm that has also reportedly sought out office properties in New York City this year. The seller was Chicago-based Nuveen Asset Management.

If Wu were to use her rising public profile and her platform on the Boston City Council to make reforms to the agency, she could probably make a real difference.

But Wu instead seems intent on pursuing a complex strategy to shutter the agency, the old white whale pursued so fruitlessly by so many critics and politicians across the decades.

Then again, maybe Wu isn’t interested so much in shutting down the BPDA as she is in using it as a cudgel with which to hammer away at Walsh in advance of a run.

For aspiring mayors, the city’s development agency has long proved a valuable whipping post.

In her report, Wu relies heavily on the findings of the extensive audit that Walsh, with reform in mind, ordered up after he won election back in 2014.

The audit provided a motherload of political dynamite to critics of the BPDA, from millions of dollars in rent never collected agencyowned properties on to sweetheart deals that let favored developers off the hook for millions more in affordable housing requirements.

Yet Wu gives short shrift to the changes Walsh made in the audit’s wake, ridiculing them as simply changing the agency’s name

and appearing to suggest that it is still business as usual at the ex-BRA. Still, given the BPDA’s somewhat checkered history, why not replace it with a planning department and a planning board?

As the city has grown more prosperous and vibrant, corruption certainly hasn’t disappeared but it doesn’t pervade everyday economic and political life like it once did.

The agency’s role has also evolved, and now it provides a useful – maybe even indispensable – buffer between NIMBY-dominated neighborhood politics and the developers and investors interested in putting their dollars to work in the city.

In communities across Massachusetts, the same local planning boards Wu envisions as a model for Boston have shown themselves to be utterly incapable of standing up to their loud-mouthed, NIMBY constituents.

It’s a big reason the Bay State is starved for new housing right now. And it’s in stark contrast to Boston, where thousands of new condos and apartments are coming online in a city that, in contrast to many rapidly greying towns and suburbs across Massachusetts, is growing again as it adds tens of thousands of new residents.

Does Wu really want Boston to follow the lead of Wellesley, Weston or Winchester?

If she thinks condo prices and apartment rents are bad in Boston today, she should wait until her new, suburban-style planning board takes charge.

Scott Van Voorhis is Banker & Tradesman’s columnist; opinions expressed are his own. He may be reached at sbvanvoorhis@hotmail.com.

OCTOBER 14, 2019

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