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How Well Do You Know The Boston Multifamily Lending Landscape?

Boston Capital Markets
Boston Capital Markets
December 21, 2017 Chase Lindsey Benfield, Event Coordinator

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Boston has long been a city known for its quality of life. Stabilized multifamily investment has continued to grow in response to the city’s popularity among young professionals. From the potential of Amazon HQ2 to a boom in healthcare and finance, Beantown continues to be a priority market for JPMorgan Chase’s Commercial Term Lending team.

 

Think you know the Boston multifamily lending landscape? Take this quiz from JPMorgan Chase Commercial Term Lending Head of the Northeast Kurt Stuart, Client Manager Daniel Vasserman and Regional Sales Manager Robert Keenan and learn about why they see Boston as a priority market for multifamily lending.

1

Which Boston submarket is seeing the greatest growth in multifamily investment?

Beacon Hill
Allston
Dorchester
Route 128

YOU'RE CORRECT!

While Boston as a whole has seen continued growth in multifamily investment, JPMorgan Chase has observed increased investor interest in the areas around Route 128, including neighborhoods like Brookline, Cambridge and Somerville, Vasserman said. Only 10 miles from Downtown Boston, the areas around Route 128 offer an in-demand rental market with access to key employment centers as well as cultural attractions, retail and other amenities.

“These are areas that are physically constrained and so we have always seen high demand and a limited amount of supply,” Keenan said.

YOU'RE WRONG!

While Boston as a whole has seen continued growth in multifamily investment, JPMorgan Chase has observed increased investor interest in the areas around Route 128, including neighborhoods like Brookline, Cambridge and Somerville, Vasserman said. Only 10 miles from Downtown Boston, the areas around Route 128 offer an in-demand rental market with access to key employment centers as well as cultural attractions, retail and other amenities.

“These are areas that are physically constrained and so we have always seen high demand and a limited amount of supply,” Keenan said.

2

What is Boston’s current multifamily vacancy rate?

2.7%
5%
8.25%
10%

YOU'RE CORRECT!

Boston’s multifamily vacancy rate hovered around 2.7% in Q3, according to Marcus & Millichap. Through the end of the year, low vacancy prompted an additional 5% rise in the average effective rent to $2,021/month metrowide. Multifamily investor attention and activity in Boston are high given the strength of the metro’s rental market and the positive outlook for growth. While some experts are predicting an end to the positive cycle, the Boston market remains tight across all submarkets.

YOU'RE WRONG!

Boston’s multifamily vacancy rate hovered around 2.7% in Q3, according to Marcus & Millichap. Through the end of the year, low vacancy prompted an additional 5% rise in the average effective rent to $2,021/month metrowide. Multifamily investor attention and activity in Boston are high given the strength of the metro’s rental market and the positive outlook for growth. While some experts are predicting an end to the positive cycle, the Boston market remains tight across all submarkets.

3

On average, how long does it take to close a CRE loan?

Seven days
19 days
25 to 30 days
60 to 90 days

YOU'RE CORRECT!

The standard industry timeline for closing a commercial loan is often between 60 and 90 days. The speed of multifamily investment in Boston can make this timeline cumbersome for borrowers.

Successful buyers of stabilized multifamily are the ones who can execute quickly and meet tight deadlines, Keenan said. Working with JPMorgan Chase, borrowers get that speed. Last month, the Boston CTL team closed on a purchase in Beacon Hill in 19 days.

“Having a dependable lender who can execute in a timely manner and tight timeframe is critical for clients in this market,” Vasserman said.

YOU'RE WRONG!

The standard industry timeline for closing a commercial loan is often between 60 and 90 days. The speed of multifamily investment in Boston can make this timeline cumbersome for borrowers.

Successful buyers of stabilized multifamily are the ones who can execute quickly and meet tight deadlines, Keenan said. Working with JPMorgan Chase, borrowers get that speed. Last month, the Boston CTL team closed on a purchase in Beacon Hill in 19 days.

“Having a dependable lender who can execute in a timely manner and tight timeframe is critical for clients in this market,” Vasserman said.

4

Which has been a major driver of multifamily growth in Boston?

A high number of institutions of higher learning
Growing healthcare and finance sectors
A high quality of life
All of the above

YOU'RE CORRECT!

When Amazon HQ2 announced its request for proposals earlier this year, Boston quickly emerged as a major contender. The American Fitness Index named Boston the fifth healthiest city in the country last year, and in 2016, Money magazine called Boston the best city in the Northeast. Deutsche Bank also named it the eighth best city in the world in terms of quality of life.

A contributing factor to making Boston so livable is its prevalence of jobs in the healthcare and finance sector, which grew by over 18,000 workers this year, according to Marcus & Millichap. A high concentration of institutions of higher learning have also led to growth in multifamily, as students, professors and recent graduates stay in the area, Vasserman said. Boston residents 25 years old and over with an undergraduate degree made up 44% of the population in 2017, compared to the U.S. average of 29%.

YOU'RE WRONG!

When Amazon HQ2 announced its request for proposals earlier this year, Boston quickly emerged as a major contender. The American Fitness Index named Boston the fifth healthiest city in the country last year, and in 2016, Money magazine called Boston the best city in the Northeast. Deutsche Bank also named it the eighth best city in the world in terms of quality of life.

A contributing factor to making Boston so livable is its prevalence of jobs in the healthcare and finance sector, which grew by over 18,000 workers this year, according to Marcus & Millichap. A high concentration of institutions of higher learning have also led to growth in multifamily, as students, professors and recent graduates stay in the area, Vasserman said. Boston residents 25 years old and over with an undergraduate degree made up 44% of the population in 2017, compared to the U.S. average of 29%.

5

Which was a notable Boston multifamily transaction this year?

The Tower at One Greenway
The Avanti
Atlas
None of the above

YOU'RE CORRECT!

Earlier this month, New Boston Fund sold its 217-unit luxury rental community in Downtown Boston for $144.5M, or more than $660K/unit, to PGIM Real Estate. The trophy building offers amenities like a yoga studio, dog wash and electric car charging stations.

YOU'RE WRONG!

Earlier this month, New Boston Fund sold its 217-unit luxury rental community in Downtown Boston for $144.5M, or more than $660K/unit, to PGIM Real Estate. The trophy building offers amenities like a yoga studio, dog wash and electric car charging stations.

6

How long has JPMorgan Chase had a local presence in the Boston market?

Two years
15 years
25 years
Three years

YOU'RE CORRECT!

JPMorgan Chase marries the global breadth of its services with a boots-on-the-ground approach to commercial term lending. Vasserman serves as that local connection for borrowers and works with a team that has grown with the Boston market over the past 15 years.

“We have really grown here by focusing on creating solid long-term relationships with our clients,” Vasserman said. “In my role as the local originator, I want to be a true partner to my clients and bring the global resources of the firm to them here.”

YOU'RE WRONG!

JPMorgan Chase marries the global breadth of its services with a boots-on-the-ground approach to commercial term lending. Vasserman serves as that local connection for borrowers and works with a team that has grown with the Boston market over the past 15 years.

“We have really grown here by focusing on creating solid long-term relationships with our clients,” Vasserman said. “In my role as the local originator, I want to be a true partner to my clients and bring the global resources of the firm to them here.”

7

What is the current federal interest rate?

1.25%
5.5%
1.75%
3%

YOU'RE CORRECT!

Beyond the acquisition of stabilized multifamily assets, many of JPMorgan Chase’s Boston clients are taking advantage of historically low interests rates by refinancing properties in their portfolio. Reinvesting dollars into properties and capitalizing on rent growth and occupancy gains helps investors create a cushion for future downturns. JPMorgan Chase’s scale allows it to offer continued financing opportunities no matter the investment landscape.

“We don’t try to predict where we are in the cycle,” Stuart said. “We support our clients through ups and downs and make sure they are properly leveraged to weather them.”

JPMorgan Chase’s ability to provide streamlined, low-fee lending opportunities for borrowers at any stage in the commercial real estate cycle is one of the many features that set it apart from its competitors, Stuart said. One feature is the Feel The Free Campaign, which waives four major costs for borrowers: lender legal, appraisal fees, processing fees and Uniform Commercial Code filing costs.

To learn more about this Bisnow content partner, click here.

YOU'RE WRONG!

Beyond the acquisition of stabilized multifamily assets, many of JPMorgan Chase’s Boston clients are taking advantage of historically low interests rates by refinancing properties in their portfolio. Reinvesting dollars into properties and capitalizing on rent growth and occupancy gains helps investors create a cushion for future downturns. JPMorgan Chase’s scale allows it to offer continued financing opportunities no matter the investment landscape.

“We don’t try to predict where we are in the cycle,” Stuart said. “We support our clients through ups and downs and make sure they are properly leveraged to weather them.”

JPMorgan Chase’s ability to provide streamlined, low-fee lending opportunities for borrowers at any stage in the commercial real estate cycle is one of the many features that set it apart from its competitors, Stuart said. One feature is the Feel The Free Campaign, which waives four major costs for borrowers: lender legal, appraisal fees, processing fees and Uniform Commercial Code filing costs.

To learn more about this Bisnow content partner, click here.

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Related Topics: Kurt Stuart, Chase, Live-work-play, Route 128, Beacon Hill, Daniel Vasserman, U.S. interest rates rise, multifamily investment, Amazon HQ2, Robert Keenan