Developers to Second Tier Markets: You're OK
A hot topic at a recent meeting of about 400 attorneys here was the expansion of the developer list of the Top 5 US property markets to a Top 10 list, says one event host, Goulston & Storrs director Dan Rottenberg (with ULI's Stephen Blank). Intense competition for prime sites, and greater comfort with strengthening real estate fundamentals, is leading developers and real estate companies to look beyond Boston, New York, DC, LA and San Francisco to secondary markets in South Florida, the Mid West, Texas, Oregon, and southern California. At the annual Meritas meeting held here recently, there was also talk of alternative asset types like industrial/warehouse and condos coming into favor.
In Boston, where the Fenway (above) and Seaport are rife with new construction, the real estate market has shaken off the stupor of the recession. Market conditions are moving in the right direction but spec development still isn’t prevalent. Instead, there’s a new wave of big mixed-use projects. The benefit: line-up an office anchor tenant and construction can start on the retail and residential components, Dan says. (Then the employees of that office can live and shop there, too, meaning less traffic.)