Bisnow's Boston Multifamily II
Millennials are finally moving out of their parents’ basements because they’re getting jobs and earning good money, says Bozutto president Julie Smith, a panelist at Bisnow's recent Boston Multifamily event. Of her company's 16 projects here, 70% of the residents are single and 60% are Millennials. Not to worry empty nesters: Julie expects to see more of you moving into the highly prized “walkable” developments coming online. The multifamily market will be aided by the relatively small number of condominiums reappearing. Prices to buy are so high, it makes the strong rents look good. Julie adds that developer concessions in some new rental buildings are a short-term phenomenon.
In Allston, a once scruffy neighborhood dominated by students, Mount Vernon Co CEO Bruce Percelay is developing The Green District multifamily community, which investors are buying for $148M, a sub-4% cap rate. Back in the day, Starbucks was hesitant to open a store there; recently, it signed a 10-year lease. The Bee’s Knees market is also moving in. These days, the Hub’s on fire—in a good way. Bruce is so confident that we’ll snag the 2024 Summer Olympics, he’s offering any tenant who signs a nine-year lease free tickets to the games (ha ha)!
Boston’s educational institutions provide stability for the economy and flood the city with students who absorb housing built decades ago for working families. Mayor Walsh is searching for new incentives that will motivate private developers to build more housing for the 30,000 students who live off campus, says Devin Quirk, director of operations for the city’s department of neighborhood development. Overall, the Mayor’s housing plan calls for 53,000 new residences by 2030, a 20% increase in the housing stock. One big challenge: finding sites. (Have they looked under ping-pong tables? We see lots of students sleeping under those.)
In coming decades, the region will need 43,000 new housing units, but it’s hard to envision some suburbs doing their part. The number of rental mid-rises being built in close-in ‘burbs is “paltry,” says CC&F CEO Jay Doherty. He knows; he’s mining these towns for transit oriented development sites and they’re not easy to find. Some towns aren’t required to build multifamily housing under the state’s affordable housing law known as 40B. There are 2,000 units in development or recently completed at Alewife in Cambridge because the city has encouraged it, says Jay, whose team recently delivered the Atmark for O’Connor Capital Partners.