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New Boston Fund executive chairman Jim Rappaport says office buildings have become expensive, and it’s taking an inordinate amount of time for deals to come together. (Expensive, time-consuming, and difficult to work with—just like Lindsay Lohan.) Hear more from this CRE vet at Bisnow’s 3rd Annual Boston State of the Market Summit, Sept. 21 at the Renaissance Boston Waterfront Hotel. Register here!
New Boston Fund Executive Chairman Jim Rappaport
Jim tells us that the time to close deals has, in general, nearly doubled because both sides want to wring out as much risk as possible related to: interest rates, lease renewals, and rent growth. There’s also a marked disconnect between the buyers’ and sellers’ impression of prices. Jim says buyers are so risk averse that they don’t value an income stream as much as they previously might have. A bump in the stream that wouldn’t have bothered them five years ago can scotch a deal these days. (C'mon folks, what would happen if salmon stopped swimming because of bumps in the stream? Hungry bears.) In Boston metro, meanwhile, some office markets are doing very well like Kendall Square and Back Bay, while others are depressed. For instance, towns around I-495 are struggling with empty space left by financial service and high tech companies.
Reznick (Office) MBOS