Jeff Munoz shares perspective on Boston CRE market in New England Real Estate Journal 

BOSTON (Aug. 2, 2023) — Jeff Munoz, vice president of Northmarq’s Boston Debt + Equity team, recently authored a New England Real Estate Journal article, “Boston’s commercial real estate market remains resilient, underpinned by its strong economic fundamentals.”

Local and regional banks, which have historically been the overwhelming source of construction financing in Boston, have pulled back on funding construction projects. Although there are many reasons for this decrease, Munoz says “much has to do with where current rates stand and if the property’s cash flows upon completion can support the higher payments.” Investors may have to pay down their loan balances out of pocket or risk forcing a sale as construction loans with upcoming maturities could find significantly lower refinance loan amounts.

Where are lenders still active?

Amid economic instability, Class A offices, lab space and medical offices have experienced the strongest leasing activity, and newly built offices are in the highest demand. Munoz says this is where lenders are still active. The lab sector specifically has shown strength while tech and pharmaceutical demand for space continues to surge, and much of the new office supply coming is lab space.

What to expect

Munoz anticipates investors will expect more favorable rates in the next 24-28 months with a surge in short-term financing requests. Institutions that typically lend on 10-year terms or longer have started to adjust their programs to accommodate shorter terms.

“Although we cannot predict how rates will move in the future, we always explore loan structures that allow flexibility to refinance in case rates become more favorable,” said Munoz. “While this strategy may be the best play today, it’s worth exploring how short-term rates have risen compared to longer-term rates.”

Topics covered in the article include:

  • Decrease in construction financing
  • Office and lab sector
  • Short-term financing requests

Read the full article.

Northmarq is a full-service capital markets resource for commercial real estate investors, offering seamless collaboration with top experts in debt, equity, investment sales, loan servicing, and fund management. The company combines industry-leading capabilities with a flexible structure, enabling its national team of experienced professionals to create innovative solutions for clients. Northmarq's solid foundation and entrepreneurial approach have built an annual transaction volume of more than $39 billion and a loan servicing portfolio of more than $76 billion. Through the 2022 acquisition of Stan Johnson Company and Four Pillars Capital Markets, Northmarq established itself as a provider of opportunities across all major asset classes. For more information, visit: