COMMUNITY BANK CONFERENCE
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OCTOBER 29, 2015
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THE
FINANCIAL
www.bankerandtradesman.com
WEEK OF MONDAY, SEPTEMBER 14, 2015
SERVICES
AND
REAL
ESTATE
WEEKLY
FOR
MASSACHUSETTS
A Publication of The Warren Group GROWING GO-BETWEENS
Wisdom Of The Crowd? Online Platforms Match Investors With Developers BY STEVE ADAMS BANKER & TRADESMAN STAFF
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any small investors are eager to invest in commercial real estate but lack the deep pockets required to buy into a hedge fund or the time commitment to be a landlord. At the intersection of real estate and technology, crowdsourcing is connecting them with developers seeking non-traditional sources of financing. “What the stock market has done for public companies, crowdfunding has done for the real estate developer,” said Jeffrey Brooks, president of Boston-based multifamily developer Brooks Cos. More than 1,200 crowdfunding platforms have been launched globally in recent years, where investors can pool their assets to buy into properties from apartment complexes and shopping centers to office buildings, with minimum investments as low as $5,000. Crowdfunding platforms raised $16.2 billion in 2014 and are on pace to hit $34.4 Continued on Page 10
COMMERCIAL INTERESTS
Lux Apartments Fetching Top Dollar Prices Per Unit Topping $500K And Heading Up
HATE TO SAY ‘I TOLD YOU SO’
FED STUDY: DURBIN HAD NO IMPACT ON PRICES FOR CONSUMERS In Reg. II’s Wake, Swipe Fees Rise For Many Retailers BY LAURA ALIX BANKER & TRADESMAN STAFF
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t is sometimes said that the definition of a true compromise is one in which neither party is really happy about the end result. If you accept that definition, perhaps the Durbin Amendment represents the ultimate compromise. The Durbin Amendment, a last-minute provision of Dodd-Frank Act, put a cap on the fees banks over $10 billion in assets could collect on debit card transactions – or rather, it directed the Federal Reserve to regulate that matter. But the cap on interchange fees was supposed to make up for it, at least to consumers, by enabling merchants to lower their prices because they would save a bundle on swipe fees. Not so much. According to a recent study out of the Federal Reserve Bank of Richmond, the Durbin Amendment resulted in neither cost savings to consumers, nor (interestingly enough) savings to merchants. “We were saying this back when this was first proposed, that it wasn’t going to help the consumers at all and that there were going to be a lot of unintended consequences,” said Jon Skarin, senior vice president
at the Massachusetts Bankers Association. “I think the Richmond Fed has proven both of those things to be accurate.” Durbin’s impact on the banking industry has been known for some time now. A Federal Reserve study released last year estimated that Durbin slashed yearly interchange fees to banks over $10 billion in assets by as much as $14 billion, or 5 percent of noninterest income, and that those banks coped with the loss of interchange revenue by hiking deposit fees, recouping around 30 percent of the lost swipe fees. However, Durbin’s impact on merchants had gone largely unexamined, and that prompted the Richmond Fed to partner with Javelin Strategy & Research on a study of Regulation II’s effects on 420 merchants across 26 sectors. Among the retailers surveyed, two-thirds reported either no change or they did not know whether their debit costs had changed as a result of Durbin. Less than 10 percent reported a Continued on Page 11
The Richmond Fed surveyed 420 merchants across 26 sectors. Of the survey respondents:
67%
reported no change or did not know of any change
25%
reported an increase in debit costs
8%
reported a decrease in debit costs
75%
reported no price change as a result of Durbin
23%
reported a price hike in the wake of Durbin
2%
reported price cuts as a result of Durbin
76%
reported no increase or decrease in restrictions on debit card use
12%
reported an increase in restrictions
12%
reported a decrease in restrictions
Survey results continue on page 11
BY SCOTT VAN VOORHIS BANKER & TRADESMAN COLUMNIST
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hink office tower prices have gone bonkers? Just look at some of the insane numbers new luxury apartment towers in Boston and Cambridge are fetching. Luxury units are flooding the downtown Boston market right now, with a new apartment tower seemingly on every corner. But investors, far from worried about a bubble, are SCOTT VAN VOORHIS shelling out unprecedented numbers to snap up these posh rental high-rises and towers and add them to their portfolios. Deals for apartment towers and buildings across the Boston area are on track to top $4 billion by the end of the year, blowing away the high-water mark set back in Continued on Page 3
CONTENTS
Residential .............................................................. 8
Banking & Lending ................................................ 11
Points ....................................................................... 4
In Person .................................................................. 7
Classified Sections ................................................. 12
By The Numbers ....................................................... 6
Commercial & Industrial ........................................ 10
Records Section...................................................... B1