New Boston Fund's Bets; The Deal Sheet
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|There are two types of markets that interest New Boston Fund SVP Mike Buckley: those with significant distress—like Miami, Raleigh, and Atlanta—and those that have escaped the distress and are growing, like Boston and DC. For him, this means a two-pronged strategy, which he'll talk about more at Bisnow's second annual Boston Capital Markets Summit Oct. 29 at the Long Wharf Marriott. (Register here!)|
|We sat down with Mike to find out more. In distressed markets, NBF is buying fundamentally sound properties that have a major impediment, such as a defaulted loan, a physical structure in need of renovations or previous management issues that have impacted leasing. Once NBF corrects the problem, a property with the right appeal can have leasing success. In this cycle—which has not yet shown signs of a broad-based recovery (think GDP and job growth)—value investing is a zero-sum game, says Mike. "Our gain is the other landlord’s loss."|
|In markets that escaped deep distress, Mike says that it's NBF's goal to get in front of trends. Here, NBF is shopping in the Seaport for office space that would attract tech companies seeking reasonable rents. Similarly, it snapped up the vacant 111 K St in DC's emerging NoMa district in Q2. It's also doing selective development in these markets, like Parcel 24, the long-planned multifamily project in Chinatown (rendering above) that NBF is building in partnership with the Asian Community Development Corp and will break ground soon. Industrial BTS projects in Northern Virginia and Miami are under way and an asset type that generates attractive yield, he says.|