REGISTER ONLINE TODAY! AT WWW.NEMORTGAGEEXPO.COM Established 1872 WEEK OF MONDAY, OCTOBER 21, 2013 www.bankerandtradesman.com THE FINANCIAL SERVICES AND REAL ESTATE WEEKLY FOR MASSACHUSETTS A Publication of The Warren Group FADING ALLIANCES War Brewing COMMERCIAL INTERESTS Over Listings Cracks Forming In Real Estate A TALE OF TWO CITIES World Could Change Business Boston May Be Booming, But the Motor City’s Got Upside Too BY COLLEEN M. SULLIVAN BANKER & TRADESMAN STAFF WRITER BY SCOTT VAN VOORHIS downtown Detroit is on the move right now, even by rewing tensions between some of BANKER & TRADESMAN COLUMNIST Boston standards. the country’s biggest brokers and t might have helped had Bos- In fact, along with a pretty tough baseball team, this Bthe nation’s 900-odd multiple list- ton Mayor Thomas M. Me- scrappy underdog of American cities has something ing services (MLSs) may create a schism Inino taken all of two minutes that is in short supply these days in the Hub – massive that could shake up the entire real estate to Google “downtown Detroit” upside potential. industry. before trashing the Motor City. “The downtown Detroit market is as hot as I have As real estate portals like Zillow and In fact, instead of recom- ever seen it,” said downtown Detroit market expert Trulia have become more and more pop- mending Detroit be blown up David MacDonald, an executive vice president at SCOTT VAN VOORHIS ular with consumers (and Wall Street in- to start all over again, Bos- Jones Lang LaSalle. vestors), the rest of the real estate indus- ton’s long-time mayor might have even learned a Menino, of course, is not alone in taking pot try is scrambling to think up new ways thing or two about how low business costs are shots at Detroit. It has been open season to keep consumers sparking a corporate renaissance in the em- lately on the Motor City in light of the his- coming to their own battled city. toric bankruptcy filing by the city’s no- sites. Sure, Boston is booming, but De- toriously corrupt and inept city gov- The increasing troit is not the complete basket case ernment. The filing came just a few competition is caus- that is often portrayed in our lazy months after former Detroit Mayor ing divisions among bones media and by pols look- Kwame Kilpatrick was sen- various factions ing to get a quick sound bite tenced to 28 years in prison within the industry: on the evening news. on corruption charges, hav- In 2011, a policy To the contrary, ing enriched his city pay WILLIAM RAVEIS change that would have allowed large Continued on Page 3 franchisors like Century 21 or Re/ Max to show home listings from every MLS their fran- chisees belonged S. to was passed by V the National Asso- CRAIG CHEATHAM ciation of Realtors (NAR) – and then reversed six months later when sev- eral large brokers threatened to revolt. 701,475 POPULATION 636,479 Earlier this year, NAR agreed to an- other change which AVERAGE OFFICE RENT would allow MLSs, $20.98 / sq. ft. $34.50 / sq. ft. SANDY CARROLL the majority of which are run by local Realtor associa- tions, to create public-facing consumer 17.6% OFFICE VACANCY RATE 12.7% search sites using member dues. That decision was condemned by The Realty Alliance (TRA) and the Leading Real Es- $39,000 MEDIAN SINGLE-FAMILY $389,000 tate Companies of the World, two coali- HOUSE PRICE tions of large independent brokers, who worried that their own dues would now be being used to fund a potent competi- Continued on Page 7 BUILDING BOOM CONTENTS Points ....................................................................... 4 By The Numbers ....................................................... 6 Greater Boston Office Construction Top In Country Residential .............................................................. 7 As Fundamentals Improve, Tenants See Value In New HQs In Person .................................................................. 8 BY JAMES CRONIN region this quarter, according to a local But the lion’s share of the seven mil- BANKER & TRADESMAN STAFF WRITER Banking & Lending ................................................ 10 brokerage house. lion square feet in the construction pro- Commercial & Industrial ........................................ 12 he Greater Boston area has entered This summer, nearly 1.1 million square cess is in Boston’s Seaport District, ac- one of the great building booms of feet of office space was delivered to just cording to Brendan Carroll, senior vice Classified Sections ................................................. 13 Tthe region’s modern history. two tenants in Boston and Cambridge. president of research for Richards Barry Records Section ......................................................B1 More than seven million square feet of Liberty Mutual has cut the ribbon on its Joyce & Partners (RBJ). In the first quar- commercial office space has opened dur- new 22-story headquarters at 157 Berke- ter of 2014, Vertex Pharmaceuticals will THE NEW ENGLAND ing the past year, is currently under con- ley St. at the border of Boston’s Back Bay begin occupying its new 1.1-million- FINANCIAL MARKETING AWARDS struction or will begin construction in the and Bay Village neighborhoods. Continued on Page 12 2 BANKER & TRADESMAN OCTOBER 21, 2013 Timothy M. Warren Jr., CEO and Publisher David B. Lovins, President and COO ON THE WEB BANKER & TRADESMAN A ROUNDUP OF OUR MOST POPULAR WEB-ONLY STORIES FROM THE PAST WEEK ESTABLISHED 1872 THE WEEK Published by The Warren Group If you weren’t reading BankerandTradesman.com last week, here’s a sampling of what you missed: EDITORIAL Editorial Director: David L. Harris BARBARA’S BESTSELLERS, CVS, TAVERN IN THE SQUARE, STARBUCKS TO poll results Editorial Operations Manager: Cassidy Murphy OPEN AT SOUTH STATION Associate Editor: James Cronin • Barbara’s Bestsellers is returning to South Station and will be joined by new tenants Web Producer: Anna Sims Do you think the mayor’s plan for CVS, Tavern in the Square and Starbucks, Equity Office announced. Editorial Intern: Allison DeAngelis an additional 30,000 housing units • “We at Barbara’s Bestsellers could not be happier to return to South Station. We have NEWSPAPERS by 2020 is feasible? been the station’s bookseller for almost 20 years,” Don Barliant and Janet Bailey, own- Reporters: Colleen Sullivan, Laura Alix A large majority of B&T readers are ers, said in a statement following the announcement of the book store’s 300 square foot Contributing Writer: Scott Van Voorhis standing with the mayor: Boston shop. “[South Station] is a great place to sell books, and we can’t wait to be back.” needs more housing. CUSTOM PUBLICATIONS • The 30,000 square foot CVS/pharmacy will begin construction of its two-level store Editor: Christina P. O’Neill complete with an escalator and elevator this November with a planned opening in March 86.5% It’s not only feasible, 2014. The store will feature a full service pharmacy, large health and beauty depart- it’s entirely necessary. MARKETING & CREATIVE SERVICES ments, convenience food offerings and general merchandise. Director of Marketing and Creative Services: John Bottini • The station also plans to renovate its restroom facilities. “Restroom changes will include creation of an airport-quality ladies room in the former Clarke’s space and an expanded, Absolutely not, and he Marketing Communications Manager: 13.4% Michelle Laczkoski high-quality men’s room in place of the current restroom configuration,” Britton Derkac, won’t be there to make Design Production Manager: Scott Ellison director of leasing at Equity Office, said in a statement. it happen. Graphic Designers: Tyler Grazio, Tom Agostino, Amanda Martocchio As always, the mayor PUBLISHING GROUP SALES .1% exaggerates, but some Director of Media Solutions: George Chateauneuf is better than none. Advertising Group Sales Managers: Richard Ofsthun Advertising and Events Interns: Brian Charron, Matt Hart NEWSPAPERS Advertising Account Manager: Erik Mohn, Jonathan Grimm Classified Advertising Sales Manager: Wayne Gregory CUSTOM PUBLICATIONS Advertising Account Managers: Mark J. Schultz, Jeff Nieves, Kelsey Bell, Claire Merritt Advertising Account Managers: Jiayi Fang COAKLEY SUES FORECLOSURE RELIEF GROUPS FOR TAKING $350K IN ILLEGAL FEES FROM HOMEOWNERS EVENTS Events Manager: Sarah Warren • Attorney General Martha Coakley is suing several non-profit foreclosure prevention organizations, saying Events Coordinator: Emily Torres the groups solicited $350,000 in illegal advance fees from homeowners, violating a 2007 law intended to protect foreclosure victims. DATA PRODUCTS GROUP • The attorney general’s suit claims the defendants portrayed themselves as tax-exempt, non-profit orga- Director of Product Strategy: Marie Wentling nizations, but operated like for-profit businesses, requiring homeowners to deposit up to 25 percent of Director of Sales, Information Solutions: Mary Suter their gross monthly incomes in order to apply for federal and other mortgage relief programs. Between Data Solutions Account Managers: Patrick O’Keefe, Molly Simpson March 2010 and October 2012, the firms racked up more than $350,000 in deposits from homeown- Data Solutions Account Manager and Fulfillment Services: ers, which the defendants spent on their own rent and mortgage payments, car insurance fees, car re- William Visconti pairs and vehicle excise payments. Data Solutions Senior Sales Support Representative: • The complaint names three organizations operated since 2009 by a ring of five defendants: the Alliance Alice Diggs for Affordable