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Investors Unplugged

Investors Unplugged
Yesterday, CRE investors let loose with some reasons for jumping in (or holding back) in today's anomalous market during a breakfast forum hosted by NAIOP and moderated by DLA Piper?s Richard Rudman at the Seaport Hotel. Mostly, they're confident that Boston will continue to be a much sought after market.
Investors Unplugged
We snapped panelist AEW Capital's Maureen Joyce, who oversees portfolios with an aggregate value of about $1.2B, talking to NAIOP CEO David Begelfer after the session. She says CRE values are going up even though fundamentals haven?t improved much because there's capital out there that needs to get to work. If you have a significant multifamily portfolio, she says, ?You?ll see a lot of appreciation.? She also says Boston is on many investors? radar even though CRE rents have declined and leasing activity is ?on par? with other major US cities.
Charles River Realty Investors? CEO Brian Kavoogian (left) and The Davis Cos.? Jonathan Davis at NAIOP event
Charles River Realty Investors? CEO Brian Kavoogian (left), who's hit the mark with some very profitable Boston picks over the past two years, added that investor confidence has been boosted by greater stability in the capital markets. He expects to see rising rents as vacancies return to single digits in a submarket like Waltham. Meanwhile, endowments that look out 10 years, are eyeing real estate for attractive returns. The Davis Cos.? Jonathan Davis, which is very active with a $230M fund, says there's ?much more leasing velocity in Boston? than elsewhere and an increasing number of tenants are talking about expansion. He says underwriting acquisitions now is ?all about the cost of capital.?
Intercontinental Real Estate's Peter Palandjian at NAIOP event
In discussing prospects for future development, Intercontinental Real Estate's Peter Palandjian says he's sitting on six acres?walking distance from here?, which is permitted for 584 units. ?We can't make sense of it.? It would be too big to build all at once in today's economy and too expensive to deliver in phases. He looked at other uses, but still isn't sold. ?I'm usually an optimist, but I won't do spec development in Boston, one of the better markets.?