Despite uncertainty and distress in major asset classes like office and life sciences, Boston real estate leaders are seeing big opportunities in other sectors.
The heads of The RMR Group, Lupoli Cos. and National Development said Tuesday at Bisnow‘s CEO Roundtable event that they have their eyes set on new investment and development opportunities in multifamily, senior housing and retail assets both locally and nationally.
Due to the state’s limited supply of multifamily and rising rents in the retail space, these CEOs are eager to invest in those sectors. And one of the firms is looking at growing in the alternative lending space to help meet future investment demands.
Bisnow/Taylor Driscoll
Goulston & Storrs’ Jason Dunn, RMR Group’s Adam Portnoy, National Development’s Brian Kavoogian, Lupoli Cos.’ Sal Lupoli and Newmark’s Robert Griffin Jr.
“The things that we’re most excited about and thinking about deploying capital into is really multifamily,” The RMR Group CEO Adam Portnoy said at the event, held at the Boston Hyatt Regency. “We think there’s really strong tailwinds around the multifamily theme.”
The Newton-based investment firm has a national focus with 35 offices across the country and nearly $41B in assets under management. Portnoy said that the main focus for its multifamily investment would be in the Sun Belt, which has seen a flood of new multifamily development in the last year.
National Development CEO Brian Kavoogian echoed the attractiveness of the multifamily sector and said that his firm was looking to do more ground-up multifamily development and senior housing investment this year.
“We’re focused on the ground-up development of senior housing, which we’ve been in the senior housing business since the early 90s, as well as acquisitions in that sector throughout the Northeast,” Kavoogian said. “We would love to be buying an existing multifamily, but yields have compressed to a level where we just think there’s better opportunities, selectively, in ground-up development.”
The firm just had a leadership change, with Kavoogian stepping in as CEO as co-founder and longtime managing partner Ted Tye will be officially stepping down from his role later this year.
Kavoogian said his firm will step back from the life sciences sector as the slowdown continues. The firm completed the 346K SF Lilly Seaport Innovation Center in Fort Point in partnership with Alexandria Real Estate Equities last year, and Eli Lilly and Co. moved into the space in August.
“As we look forward, we have very little life sciences expectations from an investment standpoint, just given the supply space,” Kavoogian said. “It’s tough to take life sciences out as an investment category. It was a very good-sized check and, for many years, very good margins.”
Sal Lupoli, founder and CEO of Lawrence-based Lupoli Cos., said that his firm is interested in investing in all asset classes, but multifamily has been its fastest growing sector, with a focus in the Merrimack Valley region.
His development firm, the second-largest in the state, last year secured Hiper Global as a tenant at its 2.3M SF mixed-use development in Littleton. The development features 1,100 housing units, a 150-room hotel and 600K SF of office and research space.
“We focus on the area where there’s opportunity,” Lupoli said. “When you talk about the Merrimack Valley, what I can speak specifically on, there are 27 cities and towns. What we do is we’ll knock on almost every single city and town, and we’ll introduce ourselves to the economic development department, and we’ll talk about what opportunities are existing in your city right now?”
Bisnow/Taylor Driscoll
MassBio’s Kendalle O’Connell
The executives also pointed to retail as another attractive investment opportunity.
The RMR Group is looking into investments in the retail space. The sector has seen historically low vacancy in Greater Boston and has drawn strong investment activity, especially in urban centers like Boylston and Newbury streets.
“We actually, in the last year, have become quite bullish on the retail sector,” Portnoy said. “I expect that over the next 12 to 18 months, we’ll be deploying more capital into retail.”
Last week, Apple bought the storefront it has occupied since 2008 on Boylston Street for $88M, one of the city’s priciest deals per square foot in years. Newmark co-Head of Capital Markets Robert Griffin said the deal is a sign that the market continues to be an attractive investment play not only for seasoned investors but for retail occupiers.
“Apple has never bought a store on its own,” Griffin said. “When the retailers themselves start believing in the real estate and the demand in certain markets, then you know it’s going to take off.”
Griffin said other urban types of retail, including open-air shopping centers and grocery-anchored sites, have also been selling.
“Retail is the hottest it’s ever been since I’ve been in Boston,” Griffin said.
On Newbury Street alone, retail rents rose 10% in 2024, landing the shopping district as the 10th priciest in the country, according to Cushman & Wakefield. Average rents stood at $440 per SF, up from $400 per SF in 2023.
The CEOs also discussed the lending environment in the region, with all of them stating that regional and local lenders are ramping up their activity.
“Generally, I would say there is not going to be any problem finding real estate debt in this country in 2025 led by private credit but, of course, it’s forcing everybody down the chain to be more competitive in terms of underwriting yields,” Kavoogian said. “Most of the local banks and regional banks and even national banks we work with are all back in business.”
However, Portnoy said there has been a pullback of national banks, and this is creating new opportunities. He said one of the firm’s priorities is to boost its lending this year.
“A lot of big banks have pulled back from lending against commercial real estate for obvious reasons,” Portnoy said. “We think there’s a void in the market. Many people like us are trying to fill that void. We think we’re going to be able to deploy lots of capital investing or making loans against commercial real estate.”
