Urban Investment Beyond the Core

Kenan Bigby of Boston Financial sheds light on trends in affordable housing, transit-oriented development and investment opportunities in secondary and tertiary markets.

kenan bigbyAs managing director for Trinity Financial, a real estate development company based out of Boston, Kenan Bigby helps lead Trinity’s strategy of emphasizing middle-income multifamily housing and understands the need for more transit-oriented developments in the Northeast.

While the firm is an urban developer, and enjoys working in major cities such as Boston and New York, it also looks to gateway cities outside of core markets.

Some recent projects include Treadmark in Dorchester’s Ashmont neighborhood, Boston East in East Boston, One Canal in downtown Boston and a couple upcoming multifamily projects in the New York area including at 425 Grand Concourse and 3160 Park Ave.

Bigby recently took some time out of his schedule to talk with MHN about the state of the industry, current trends and the outlook for multifamily investing.

MHN: What have you seen so far in 2017 when it comes to multifamily investment opportunities in your area?

Bigby: We are developers/owners, active in the northeast from Greater Boston to New York, including markets in Connecticut and Rhode Island. We are focused on urban development—core markets as well as secondary and tertiary markets that are well served by public transit. We are seeing more interest in markets outside of the core primary markets, especially if there is a TOD aspect. We are also seeing an increased interest in middle-income housing; investors seem willing to entertain slightly lower returns because of the reduced risk profile associated with not chasing top of the market rents or sales prices.

MHN: What do you see as the big trends in middle-income multifamily housing today?

Bigby: Trinity has been developing low- and moderate-income housing for quite some time. Recently we have seen municipalities recognize the increasing need for middle income or workforce housing resulting in policy changes aimed at incentivizing more activity in this space. We have seen density bonuses, property tax relief and even public funding being made available to spur the creation of units affordable to this population.

MHN: How would you characterize the need for more transit-oriented development?

Bigby: Opportunity for TOD is one of the core criteria we use when evaluating development prospects. Communities are beginning to see the value in creating density at transit hubs, and the connection to wider economic opportunity makes sense for residents looking for less expensive living options.

MHN: How has a new president in the White House impacted multifamily so far this year?

Bigby: So far, the biggest impact has been on our affordable housing development work. The uncertainty around corporate tax reform has resulted in the value of the Low Income Housing Tax Credit dropping significantly.

MHN: What is your biggest piece of advice with today’s current market?

Bigby: I’m hoping that investors continue to see the value in secondary (or even tertiary) markets and are willing to explore investments outside of the traditionally hot core markets. Rents and sales prices at the high end of the market seem to be reaching a plateau, but there remains a large segment of the population that is priced out at these rent levels—making more affordable multifamily development an attractive option especially when connected to employment hubs via rapid public transit. Patient capital is necessary. Equity that is looking for high leverage and a quick exit is much less compatible with this type of product.