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the
financial
www.bankerandtradesman.com
W E E K O F M O N D A Y , M AY 9 , 2 0 1 6
services
and
real
estate
weekly
for
massachusetts
A Publication of The Warren Group ALL MUCKED UP
New FASB Rule Will Put Leases On The Balance Sheet
First Quarter Results Are In For 128/Mass Pike Asking rents
$36
per square foot
Experts Say Reg Could Impact Lending And Leasing Alike
7%
BY LAURA ALIX BANKER & TRADESMAN STAFF
A
new rule approved in February by the Financial Accounting Standards Board (FASB) could have wide-ranging consequences for banks, from the branch right down to the balance sheet. FASB’s new rule would require all businesses and nonprofits to book all longterm leases (anything over 12 months) as both assets and liabilities on their balance sheets. Right now, many companies disclose those leases in the footnotes to their financial statements, and unless they’re lease-to-own transactions, they typically aren’t recorded as liabilities. For financial institutions, which not only lease property but also lend money to businesses that lease property, the implications are numerous. Continued on Page 11
over Q4 2015
128 RENTS TAKE OFF
Tech Firms, Life Sciences Populate The Suburbs
“This market feels more mature. It’s not five guys in a pickup truck with $100 million looking for 100,000 square feet of space.” — Matt Daniels Managing Director Suburban Brokerage Team, JLL
OUTSIDE THE BOX
Economics And Civic Planning Collide In Winthrop Square
18%
over Q1 2015
Total absorption
205,200
Timing, Design And Office Component Differentiate Proposals
square feet
Total available
BY STEVE ADAMS BANKER & TRADESMAN STAFF
3.1 million
T
he two largest development proposals for Boston’s Winthrop Square have starkly different visions for an overlooked corner of the Financial District. Both developers Steve Belkin and Thomas O’Brien propose 725-foot-tall towers with a substantial allotment of luxury condominiums, reflecting the current market’s hottest category. But their approaches diverge in satisfying the Boston Redevelopment Authority’s requirements for an innovative economic development strategy and new downtown public spaces. Continued on Page 10
A MORE MATURE MARKET
square feet
Vacancy rate
10% Source: JLL
BY SCOTT VAN VOORHIS BANKER & TRADESMAN COLUMNIST
T
he Route 128 is corridor headed for a new golden age, the likes of which we haven’t seen since the 1980s, when it was known as “America’s Technology Highway.” Rents in Greater Boston’s marquee suburban lab and office market have hit highs not seen since the dotcom stock bubble of the late 1990s, while the amount of new construction and renovation work is soaring, a new report by JLL shows. In fact, what’s happening now on 128 arguably beats both those 1980s glory days, which ended with an epic real estate bust, as well as the frenzied real estate deal-making during the dotcom bubble of the late ’90s. The 128 market is hot again, but not crazily so. And it’s an expansion built to last, with a wider range of companies leading the way, as well as a fuller and deeper real estate
lineup that includes things like restaurants, shops and apartments. “As someone who worked in the dotcom bubble, they had pockets and pockets of money, but they didn’t have a product to deliver,” recalled Matt Daniels, suburban brokerage chief for JLL’s Boston office. “We [now] have established companies that are looking to grow here.” Asking rents in the Route 128/Mass Pike market jumped nearly 7 percent in the first quarter and are up more than a whopping 18 percent for the year, JLL reports in its firstquarter market survey. The current asking rent of $36 a square foot along the 128 corridor is the highest since 2000, the firm notes. And rents are poised to soar even higher as we get deeper into 2016, with 383,000 square feet of new office space set to come online this year at an average asking price of $48 a square foot. That’s about what it cost to Continued on Page 3
INVENTORY REMAINS LOW
CONTENTS Points ����������������������������������������������������������������������� 4
Residential �������������������������������������������������������������� 8
Banking & Lending ������������������������������������������������ 11
By The Numbers ������������������������������������������������������� 6
Compliance Update �������������������������������������������������� 9
Classified Sections ������������������������������������������������� 13
In Person ������������������������������������������������������������������ 7
Commercial & Industrial ���������������������������������������� 10
Records Section ������������������������������������������������������ B1