BOSTON: Boom Goes The Dynamite
Boston has the perfect ingredients for a multifamily boom cocktail: shortage of apartments, rising tide of renters, and surplus of investors from around the country. (Add whiskey, vermouth, and taller buildings and you've made a Manhattan.) At Bisnow's 4th annual Multifamily Summit last week, state secretary of housing and economic development Greg Bialecki told our crowd of 500 that the state is doing its part. Despite some municipalities' preference to stay the same, Massachusetts and metro Boston are growing faster than the US. With 7,500 multifamily units produced in '13, there's lots of room to ramp up construction, he says.
Greystar senior director Doug Root sees acquisition opportunities ahead, as the regional economy remains solid, and demographic shifts favor rentals; young workers have scant savings and empty nesters are eager to unleash from home maintenance. (Water heater repair is a young man's game. Speaking of which, new video game idea: Grand Theft Water.) During this multifamily boom in Boston, there are plenty of merchant builders, and they'll be going to market to keep investors like Doug busy. But he doesn't expect the 8% rent growth he saw in early cycle deals. To compensate, Greystar is focused on finding assets they can renovate to run more efficiently.