From Michael Coyne
SVP, Multi-family Capital Markets
The condominium market is heating up again. JLL multifamily expert Mike Coyne, a panelist at NAIOP’s recent program on the condominium capital markets, presented the opportunity and financial trends that will impact our next wave of construction.
“Boston has the highest percentage of young professionals in the country,” Mike said. “Approximately 35% of the population is between the ages of 20 and 34. The rental stock, however, is old. Nearly half of the city’s 175,000 rental units were built prior to 1940.”
“Today’s condo market inventory is at a 10-year low.” Program moderator Sue Hawkes, president and CEO of The Collaborative Companies, pointed out that Boston currently has just 236 available units. Mike said that the market is ripe for development and conversions but design trends must be aligned.
He examined three types of sites – land, redevelopment, and new construction – and determined that in the rental vs. condo development decision-making process, condos win in top locations every time.
“The overarching question is can development yield for capital justify the investment,” said Mike. “We call that the ‘inflection point.’ Right now there isn’t enough available land for a condo boom, but the time is right for the production of more for-sale housing in the right location.”
Please don’t hesitate to contact me for more information regarding condo and rental development and capital markets.