Peter Gottlieb
President and CEO, Hobbs Brook Real Estate
Age: 44
Industry experience: 22 years
As suburban office vacancies crept up during most of 2024, Hobbs Brook Real Estate bucked the trend by executing 683,000 square feet of office leases in the past 12 months, representing 15 percent of its portfolio. The Waltham-based company owns 4.5 million square feet of commercial real estate, including 2.6 million square feet in Lexington and Waltham, and is in the process of recruiting additional tenants with building upgrades and tenant engagement activities such as bicycle repair days, holiday pop-up stores and cooking classes. Hobbs Brook also manages the real estate portfolio of its parent company, Rhode Island-based insurer FM Global. Before joining Hobbs Brook Real Estate, Peter Gottlieb was a senior vice president and regional director at Rubenstein Partners, overseeing its investments in New England and the Chicago market.
Q: Is Hobbs Brook in the market for acquisitions in the office sector?
A: We’ve been closely monitoring the market for opportunities, but given the dislocation in construction costs and the cap rates, like many others in the market, we’ve been wait-and-see. We’re waiting for the bottom of the market, and seeing some green shoots. We’ve been focusing on the existing portfolio. We’ve had some robust leasing, especially in 2024. We’ve executed 683,000 square feet in the last 12 months, and we’re in active negotiations for another 661,000 square feet. We’ve really been honed in on optimizing our portfolio. We’re early in the stages of some amenity activations at the Waltham and Wakefield properties.
Q: Were the common-area amenities planned at The Edge in Wakefield a crucial part of the Eastern Bank lease negotiations?
A: It was not catalyzed by their lease. It was work we planned on doing, and worked collaboratively with the tenant on what best suited them and future leasing activity: the activation of the cafeteria, new outdoor amenity spaces, conference facilities, all of the attributes we see in the market as they come back to the office or assess new locations for offices.
Q: ZoomInfo recently signed a 101,000-square-foot lease at 404 Wyman St. in Waltham. What is the capital improvement plan at that property?
A: We are really excited about the changes at 404 Wyman. We will be renovating our main lobby and reactivating an existing cafeteria, putting in a new fitness center at an Equinox level of finishes and equipment, and we’ll be activating a new building conference center. The conference center will be in what was a former conference center called Fourpoint. We’ll take some of that space and create a real high-end facility with training rooms, meeting rooms and AV equipment so that tenants can have as seamless a presentation as they would have in person. We’re really trying to create a class A downtown area in Waltham. We remain highly convinced that class A locations in the suburbs are going to remain in high demand for tenants with suburban mandates.
Q: You mentioned evidence of green shoots. How does that play into your investment strategy?
A: We still have a high conviction in the office sector, but I wouldn’t say that’s a blanket statement for all assets within the sector. You’re seeing a significant concentration in class A leasing activity, and you’re seeing a concentration in tenants 15,000 square feet or larger. We’ll be zoned in on trophy, quality space with robust geographies, credit tenants that have executed a return-to-office strategy post-COVID, and we and our parent company, FM Global, always apply a lens of resiliency and quality of construction. You’re seeing higher performance in the Sun Belt and New York City markets, so we’ll hone in on those markets. We do have high conviction in a tech rebound, so we’ll look at those markets with concentrations in talent in the AI realm.
Q: Are you looking at any mixed-use redevelopment opportunities in the suburbs?
A: We think the MBTA Communities law is an exciting opportunity and growth possibility for overall suburban markets. HBRE will not develop multifamily. We will look to dispose of assets that may have highest and best uses for multifamily development. Boston is one of the leading multifamily markets in the U.S., so we do see some upside potential in disposing of assets that are non-performing in the portfolio to multifamily developers.
Q: What’s your outlook for suburban life science space?
A: Our lab portfolio is 100 percent leased. We have no plans [to convert office to life science] at this point. In looking at the overall pipeline of life science in the market versus tenants in the market for that space, you’re seeing anywhere from a 12 million- to 17-million-square-foot pipeline and by most estimates, somewhere between 1 million and 2 million square feet of tenant demand for that space.
Q: Are you considering acquisitions in the urban core including Boston and Cambridge?
A: We’ll continue to assess downtown Boston opportunities. There are natural barriers to entry in Boston and a resilient tenant base, but we’ll focus on class A assets and trophy assets in critical locations.
Gottlieb’s Five Favorite Books of 2024
- “James” by Percival Everett
- “Right Thing, Right Now” by Ryan Holiday
- “The River We Remember” by William Kent Krueger
- “The Splendid and the Vile” by Erik Larson
- “Misbelief” by Dan Ariely
