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A Publication of The Warren Group VERTICAL VISIONS BANKING ON MARIJUANA
Banks Cautiously Enter Marijuana Industry Financing From Business Checking To Mortgages, FIs Warm To Pot Shops
BY BRAM BERKOWITZ | BANKER & TRADESMAN STAFF
H
udson-based Calare Properties earlier this month acquired a 34,000-square-foot warehouse in Littleton for $2.7 million and secured a 10-year lease with medical marijuana provider Premier Health Group LLC for the entire building. Calare, which declined to comment for this article, obtained $1.8 million in mortgage financing for the property from Salem, New Hampshire-based Bank of New England. The bank, which also has branches in Massachusetts, did not respond to multiple requests for comment. The fact that Calare obtained a mortgage is significant. While medical and recreational marijuana is legal in many states, it is still illegal on the federal level; federally insured lenders typically have a clause in their mortgages noting that owners cannot conduct an illegal activity. This makes banks very cautious about lending to facilities that house medical marijuana businesses. But the tide may be turning, at least for smaller community banks. “We are seeing more state-chartered loans on properties with cannabis operations,” said Frank Segall, co-chairman of the Cannabis Business Advisory group at Boston-based law firm Burns & Levinson. “Some state banks and credit unions and private finance companies are getting more comfortable in Continued on Page 3
There’s Room At The Top In Built-Up Boston, There’s Nowhere To Go But Up
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BY STEVE ADAMS BANKER & TRADESMAN STAFF
oston’s Dock Square Garage used to be the real estate version of obstructed view seats at Fenway Park, with the elevated Central Artery blocking the best sight lines. Today, the 6-story brick behemoth spanning 1.2 acres has a front-row seat on the Rose Fitzgerald Kennedy Greenway and a potential future as creative office space or high-end housing, as the original developer prepares to sell and potential buyers study the potential to add more floors on top. “That area of town is changing and it’s a huge opportunity,” said Boston architect Doug Gensler, whose firm is working with several downtown property owners on potential future garage redevelopments. “Whereas before it sat on the edge of heavy traffic infrastructure, now it sits on the edge of a lot of open space and activity.” Recent acquisitions of the 125 Lincoln St. garage in the Leather District, Motor Mart Continued on Page 9
BEWARE THE BUBBLE
Credit Score Reporting Changes Impact Borrowers’ Creditworthiness Increases In Credit Availability Could Be Sign Of Bubble BY JIM MORRISON BANKER & TRADESMAN STAFF
T
By The Numbers ������������������������������������������������������� 6
Classified Sections ������������������������������������������������� 11
Banking & Lending �������������������������������������������������� 3
In Person ������������������������������������������������������������������ 7
CRE Insider ������������������������������������������������������������ B1
ax liens, civil judgements and unpaid medical bills will no longer be counted against consumer credit scores, as of July 1. Lenders and originators have long used credit scores as part of the mortgage application process and will continue to do so, they say, despite the change in reporting requirements. As the result of a lawsuit alleging that consumers’ credit scores were unfairly lowered for including liens even after they’d been removed, or having liens assigned to consumers in error, the three leading credit bureaus, Experian, Equifax and Transunion, agreed to stop
Points ����������������������������������������������������������������������� 4
Residential ��������������������������������������������������������������� 8
Records Section ������������������������������������������������������ C1
Continued on Page 8
CONTENTS
Commercial & Industrial ������������������������������������������ 9