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Office rents in Boston's Back Bay, Financial District and beyond......

Where are office rents in the Boston market today and how much lower will they go?

Boston’s central business district has earned the unfortunate distinction as the most deflated rental market in all of the Americas¹. Combine that with a lackluster economic recovery characterized by problematic job growth will hamper the pace of any real estate market resurgence, which probably cannot gain much traction until late 2011 or 2012².

What does this mean for you and how do you capitalize on it? Landlords are working extremely hard to preserve market rents on renewals and new leases. Yes, those numbers have come down significantly, but more so then that, tenant improvement allowance (T/I) and rental concessions are two buckets that deserve far more play. When one thinks about cost of space PSF, it should be that of net effective basis. Meaning the asking price less the free rent, example a 60 month lease @ $35.00 PSF with 6 months free is $32.50. Rent abatement was not an available option for tenants 24 months ago, now it has become main stream. The amount depends on the financial viability of the tenant to perform as well the landlord’s competitiveness in the marketplace.

Tenant improvement allowance in the recent past never moved above 50% of the first years rent on a standard lease term. Now, we are seeing that number grow from 65% to 110% of the first years rent. In many cases in times past tenants would have to pay to move into their new space. Nowadays tenants are getting the benefit of turnkey deals, thus no out of pocket expense.

Why hire a broker if I plan to renew my lease? My landlord and I have a workable relationship. Your landlord profits by getting the highest rent possible from you. Until your broker creates competition with your landlord, you’re a captive Tenant exposed to paying above market.

The call to action is to seek out professional advice to assist you in these tumultuous times. To learn more about how the Boston Realty Advisors commercial leasing team can help your business, please do not hesitate to contact us.

Sincerely,

William H. Catlin, Jr. • Principal   
Boston Realty Advisors
715 Boylston Street • Boston MA 02116    
T 617.850.9606 • F 877.868.1672
www.bradvisors.com • wcatlin@bradvisors.com
Boston • New York

¹ Boston Business Journal – 12.1.2009

http://boston.bizjournals.com/boston/stories/2009/11/30/daily26.html

² Emerging Trends in Real Estate 2020 – PricewaterhouseCoopers

http://www.pwc.com/us/en/asset-management/real-estate/assets/2010-emerging-trends-us.pdf

• We typically receive notice of actual availability 30-60 days prior to the availability date. Therefore, we recommend you contact us to schedule an appointment to preview possible apartments within that window of time, to insure you’re exposed to all of your options.

• The rental in market in Boston moves faster than most metropolitan cities. Due to the fast paced market, the availability is changing every minute and consequently, your on-line resources may not be up to date. Therefore, be prepared that a unit your preview on line may not be available by the time you arrive to preview apartments.

Top 100: JOHN ROSENTHAL DEVELOPER/CRUSADER

Meredith Management’s John Rosenthal is preparing to start construction on the first piece of Fenway Center, a $450M, 1.3M SF project that includes a new commuter rail stop, residences, retail, offices, and parking adjacent to Fenway Park. He’s partnering with Sox owners on what will be one of the most ambitious projects to get started since the economic meltdown.

John, with Monika Butkiewicz and his wife Maureen Berkley, director of property management, look over a model and rendering of Fenway Center. It will have 1300 parking spaces, 330 residences, 370k SF of offices, 100k SF of retail, 30K SF of park and green space, bike storage, a day care center, and community space. “We are fully permitted and shovel ready,” he says. In this credit constrained economy, John has been securing debt financing from city, state and federal sources (including stimulus funds).

John also has a one-of-a-kind office in a converted 1700’s mill and some top office personnel who walk on four legs. We snapped him with Jon Hickok and Laura Hyer, with advisors Wiley and Tazzie. John has always brought a dog to work, so when Laura came on board to run STOP Handgun Violence (an advocacy group John started), Tazzie was part of the package. As a gun owning skeet shooter, John started SHV in ‘95 with the late Michael Kennedy (son of RFK). After Michael’s death, Vickie (wife of the late Ted Kennedy) asked to take his place. John says Mass. has the most comprehensive gun violence protection and the fewest gun fatalities after Hawaii.

John (center) and his in-house counsel Jerry Belair (on his left) met last week with a URS team seeking to manage construction for Fenway Center. Work on the $12M MBTA commuter rail stop is slated to start this fall. We snapped Thalia Schlesinger, Scott Bini, and standing Steve Moore, David Tremblay, Chris Watson, and Mathew King. The Architectural Team, and Carlos Zapata Studio, the design architects, are preparing construction drawings. Suffolk Construction is the design/build GC, while J.F. White is the civil contractor. John plans to get a guaranteed construction price for Phase I this summer. Including all the planning on the mixed-use project, he says “It took seven years to get into the batter’s box.”

Jerry is Meredith’s point man for solar energy projects. Here they’re holding pics of solar arrays installed in December atop Meredith’s HQ and some of its other properties: an office building in Springfield and rental apartments in Clinton and Ware. The Fenway Center MBTA station and garage will also have solar arrays enabling them to produce more energy than they use. John has championed solar power since the ‘70s, when he also campaigned against nuclear power, an effort he continued on Saturday with an anti-nuke editorial in The Boston Globe.

 Sourced:  http://www.bisnow.com/boston_commercial_real_estate_news_story.php?p=7379

Since moving to South Boston after college in '03, many friends have also found their way over there as well.  Obviously a new location poses many questions, where is the best pizza place, where do you get your hair cut, best place for coffee, etc etc.  After realizing how often I was asked these same questions, I decided to make up my own 'southie cheat sheet' that serves as a guide for anyone new to the area, here are my picks!

NURTURE SALON - www.nurturesalonandspa.com  modern and cozy hair and nail salon at a convenient L street location, ask for Mandy  :)

OCEAN TAN SALON - Dorchester st nail salon, fast and cheap, this is my top pick for you girls needing a manicure or pedicure

CRANBERRY CAFE - An E Broadway and K street spot for great sandwiches or coffee

BROADWAYS BEST - www.broadwaysbestpizza.com  Huge takeout menu but I have to admit, we like it here because they deliver frozen yogurt!  mix and match flavors and you will have a tasty treat after dinner delivered right to your door

BAYVIEW LIQUOR - good spot on Dorchester St, not to mention they will deliver it to your door!  (617) 268-7612

BOSTON ATHLETIC CLUB (BAC) - www.bostonathleticclub.com/  Popular spot for anyone looking to break a sweat, check out their website for all the classes they have, as well as gym equipment, tennis and boot camp options, among others.  I believe the monthly membership is $79/month now, if you go tell them I sent you!

SALSA'S - www.salsasmexican.com  craving mexican food?  head to this quirky cozy spot on Dorchester St, great sangria!

PLAYWRIGHT/BEER GARDEN - www.playwright.com  www.bostonbeergarden.com/  whether you want to play some bar trivia after work or have your own southie sunday funday, these 2 bars on E Broadway are packed 7 days a week, Thursday nights are the most popular

SWEET TOOTH - www.sweettoothboston.com  amazing bakery on W Broadway if you are looking to indulge

PIZZA - L street and Land of Pizza are my picks, there are enough pizza places in southie to have you trying a new one every week for months

K & 8TH MARKET - old school mini market on the corner of, you guessed it, K and East 8th streets, known for their marinated steak tips and chicken, anyone with a back deck or roofdeck makes a point to go here atleast 1x a week

HABIT -  www.habitshop.com  North End style clothing boutique on E Broadway

TERIYAKI HOUSE - www.teriyakihouse.info  tasty chinese food and sushi at this South Boston location, quick delivery too!

CASTLE ISLAND - Great stretch of boardwalk that is a loop, popular with all ages and especially those with dogs.  Make sure you stop by Sullivan's for a snack in the summer months

BYOD - http://www.byodwash.com/  This somewhat new SB location is a hit among us dog owners (and in Southie there are a lot of us).  Great spot for special treats or toys, lots of leashes and collars to choose from too.  They also do grooming but they are known for the self service tubs you use to wash your own dog!  Pick your shampoo flavor and get started, they provide everything you need from the brush, shampoo, blow dryer, etc.  Your dog will leave there looking amazing

PAWSTONIAN - www.thepawstonian.com/  Another spot my pup spends a lot of time at, going there since he was 11 weeks old, this place is heaven for any dog at any age that loves to play.  $18 for a half day, $29 for a full day, drop off as early as 7am and pick up by 7pm.  (more on these to come for those dog lovers out there), best way to wear the dog out while you're at work!

FARRAGUT HOUSE - www.farraguthouse.com  on P and East 6th streets, this cozy old fashioned bar and restaurant is great for some comfort food, and if you like karoke, be sure to stop by on Friday nights

SIDEWALK CAFE - This E 4th and M street take out place is sure to have a line outside every saturday and sunday morning.  Breakfast lunch and dinner is available, yet their breakfast sandwiches and many different flavored iced coffees will be a reason to roll out of bed after a night out

Hope these help to all you newcomers, please comment if I missed any! 

Lindsay

lguittarr@bradvisors.com

In recent company news, founder and principal of Boston Realty Advisors, Jason S. Weissman, served as a panelist at the annual 2010 Harvard Business School Real Estate Symposium Panel on Saturday. The annual Symposium was formed in 2007 in order to bring students together with the leading professionals within the real estate industry. The conference represents a rare opportunity to hear from and meet some of the most influential real estate executives in the United States. The professionals in attendance represent the full spectrum of property related companies, encompassing development to investment banking, property services, and acquisitions. You can see a list of the panelists with bios, here.

Follow these guidelines to fix or help your current credit score.

What To Do

•    Order your credit report and search for errors. You can get free reports from    annualcreditreport.com. Dispute mistakes!  Please keep in mind there are an alarming amounts of  mistakes on Credit Reports because of the amount of credit people have and have applied for.

•    Pay your bills on time. Your payment track record accounts for about 40% of your FICO score.

•    Be patient. Negative information like late payments will generally drop off your credit report between five to seven years

•    Maintain a healthy mix of credit. A blend of revolving; such as credit cards and installment loans can help boost your score.  This is even more important over the past few years with some of the new regulations.

•    Apply for your own credit cards. Have 3 open lines of active credit at all times.

What Not to Do

•    Don’t max out your available credit. Keep credit-card balances low relative to your credit limit.  This is even more important under newer regulations (again – which ones?).  My personal suggestion is to never have a 30% credit balance or more borrowed on a credit limit.  Example: $10,000- limit on a credit card, never go above a $3000- balance on that credit card, etc.

•    Don’t dawdle when shopping for the best rate on a loan. Confine loan shopping to a few weeks so that credit inquiries won’t weigh on your score.  Please do not have 10 Banks pull your credit in 10 days.

•    Don’t open up a bunch of credit-card accounts you don’t need, thinking the higher lever of available credit will boost your score. Your FICO score will generally drop a few points with each new account.

•    Don’t close old credit-card accounts in an attempt to improve your score.  You’ll lower your total available credit, which could damage your score.
Ask me how to increase your score in 90 to 120 days?

Take out two new lines of credit (Yes, believe it or not I said take out two new credit cards) and use one for gas and one for groceries. I would suggest getting major Credit Cards (Visa, Mastercard, Amex, etc.) Use them, pay it off, use them, pay it off, use them, pay it off, etc.  Never adding any additional monthly debt, paying all of the charges off every single month.  This method will add 20 to 40 points to your Credit Scores in months.

Sources: Fair Isaac, WSJ Research

Questions? Comments? Use the form in the sidebar or call me!
bc@SmarterBorrowing.com 617.771.5021

Brian Cav is a Mortgage Banker in the Greater Boston Area with over 10 year of experience in the Financial Industry. Feel free to contact him at:
bc@SmarterBorrowing.com, tel 617.771.5021

Reprinted with the permission from www.SmarterBorrowing.com

Please visit http://smarterborrowing.com/ for additional Blog Posts, etc.
 

Mortgage Market
Mortgage Interest Rates are up .125% the past 48 hours and .25% on some mortgage products.  I would expect to see worsening Mortgage Rates this afternoon as well.  And possibly tomorrow. Yikes.

Economic Data
 Thursday's bond market has opened in negative territory again following stronger than expected inflation news. The bond market is currently down 9/32, which will likely push this morning's mortgage rates higher by approximately .375 of a discount point. The Labor Department reports that January's Producer Price Index (PPI) rose 1.4% while the core data reading rose 0.3%. Both of these readings were well above forecasts, meaning inflationary pressures were stronger at the producer level of the economy than many had thought. This is certainly bad news for the bond market and mortgage rates because inflation erodes the value of a bond's future fixed interest payments, making them less appealing to investors. They are then sold at a discount, leading to higher yields and rising mortgage rates.

Yesterday's afternoon release of the FOMC meeting minutes didn't reveal many surprises. The most notable was a minor upward revision of their expectation for this year's unemployment rate. They also reiterated a prolonged period of high unemployment and slightly raised inflation targets for this year. But the news was not welcomed in the bond market and is likely contributing to today's selling, especially after this morning's stronger than expected inflation readings.

The Labor Department will be in the forefront again tomorrow when they post the more important Consumer Price Index (CPI) for January. This index measures inflationary pressures at the very important consumer level of the economy compared to today's release that measured the producer level. With exception to maybe the Employment report, the CPI is the most important report that we see each month. Its results can have a huge impact on the financial markets, especially on long-term securities such as mortgage-related bonds. It is expected to show a 0.3% increase in the overall index and a 0.1% rise in the more important core data. If we see weaker than expected readings, bond prices should rise and mortgage rates would likely fall. However, after today's PPI results, traders may be skeptical of getting favorable results tomorrow.
 

Overall, the most important day of the week will likely be Friday/tomorrow with the CPI being released, but this week has been very active days for mortgage rates. In other words, be prepared for an active week or two in the markets and mortgage rates.

Lock/Float
If I was closing on a Home Mortgage in the next 0 to 15 Days - LOCK
If I was closing on a Home Mortgage in the next 15 to 30 Days - LOCK
If I was closing on a Home Mortgage in the next 30 to 60 Days - LOCK
If I was closing on a Home Mortgage in the next 60+ - LOCK

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Questions? Comments? Use the form in the sidebar or call me!

Brian Cav is a Mortgage Banker in the Greater Boston Area with over 10 year of experience in the Financial Industry. Feel free to contact him at:

bc@SmarterBorrowing.com   617.771.5021

Reprinted with the permission from www.SmarterBorrowing.com

Please visit http://smarterborrowing.com/ for additional Blog Posts, etc.

It's just about that time of year, St. Patrick's Day!  Southie is famous for it's annual parade, it is pretty much Boston's version of mardi gras.  From babies to those who have spent their whole life in South Boston, it is something for everyone to enjoy.  This year it will be on Sunday March 14th.  (Always held on a Sunday).  Come see for yourself!

Another fun aspect is the close vicinity to the harpoonbrewery with it's Oktoberfest and St. Patrick's day festival among a few others.  Please see link for more info, a very popular thing to do!  http://www.harpoonbrewery.com/index.cfm?pid=28571

please contact me at lguittarr@bradvisors.com with any questions!