As Northeast regional manager for JPI, a national REIT focused on the apartment sector, Kaye is finally seeing nearly five years of effort pay off with the approval or near-passage of several major apartment communities throughout the state. In most cases, including a $30-million project slated to break ground next week in Marlborough, Kaye says the bulk of the time has been spent securing local and state approvals for the developments.
"We're committed to this market, but the challenge and the risk has always been in the approval process," he says. "It's certainly not for the faint of heart."
With the risk comes reward, however, and Kaye says the recent surge of apartment rental rates in Greater Boston helps justify his company's tenacity. Double-digit rent increases have been the norm for the past several years, with rates up 15% in Boston thus far in 2000, while communities along Route 128 have seen a 16% surge. Even cities and towns on the Interstate 495 loop have seen a 12% hike thus far this year.
The key, he says, is to have the staying power to survive the process, and that is a major reason why most of the new apartment development in the state has come from well-heeled players such as JPI, which is backed by GE Capital. Marlborough took four years to get passed, as did a 240-unit complex now under construction in North Andover. That development is already virtually pre-leased, even though it will not be completed for several months.
JPI has other projects working through the pipeline in Woburn and Salem. The company also recently won backing for a massive 500-unit apartment community in Ashland, one that will be the largest market-rate apartment complex ever approved in the state. Kaye says his company is optimistic that it can break ground on $135 million worth of product by year's end.
"We should be there shortly," he says of Woburn, which will yield 205 units on eight acres of land near the critical Route 128 and Interstate 93 intersection. Salem, with 265 units, will be built in that city's downtown area near the commuter rail station into Boston. JPI is attracted to both of those communities, Kaye says, because of the high-tech labor force, which has been fueling much of the office expansion in Boston's suburbs.
Based in Irving, Texas, JPI owns and manages more than 20,000 units nationally, about 1,000 of them in Massachusetts. The firm is exploring other sites in the state.
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