James Pennington is a busy guy. He’s got a family with two young children. He’s on the zoning board of appeals in Newburyport, where he lives. He co-teaches a course at the Massachusetts Institute of Technology, “Legal Issues in the Development Process.” He’s a development manager with Criterion Development Partners in Waltham. He likes it that way.
So naturally, when things slowed down with Criterion as the market seized up, he turned a side project into a new business. Pennington had been collecting data about the Boston apartment market – both Class A, and Class B and below – to better understand what properties made good investments. He’s taken that data, developed software to serve investors and apartment owners, and created Boston Apartment Advisors, a market research company specific to Boston.
James Pennington
Title: President and Owner
Company: Boston Apartment Advisors
Age: 37
Experience: 13 Years
How do you wear the two hats of development manager at Criterion and owner and sole employee of Boston Apartment Advisors (BAA)?
I’m exclusively BAA right now. I’ve got a few properties that are in lease-up phases [for Criterion], but nothing that requires a great deal of my time.
At BAA we’ve found a niche and a need for local, on-the-ground knowledge about the apartment market here in Boston, which is unique. It’s not like any of the Sun Belt cities in particular or any other metros; it a little less efficient information market – quite a bit less, actually. Yet there is no one on the ground giving local advice. There are national firms giving advice about the Boston market, but on a very broad, portfolio, national level. They’re not able to give people custom one-on-one information about their property.
So because you’re coming from Criterion, it has the focus of what a developer would want from software?
It is actually very focused on what an owner/investor wants to see, which is a little different on what a property manager wants to see. As it evolves, it should do both: it should be both a management tool and an owner tool. It would work for a development phase project, but right now it’s really geared toward a stabilized project.
And also, on one of the things I’m doing too – and this is where the national portfolio firms really don’t pay attention – is the less than Class A properties. I’m really going to focus on Class B properties and smaller properties, too. There are a lot of landlords in the Boston area who own 20-60 units in scattered sites or smaller projects. There is really not a consultant base for people like that.
What is the percentage of the market that you call as your representative sample?
It’s growing. My nearest competitor tracks 80,000 units: that’s MPF Research. I have identified almost 300,000 units. I haven’t sampled each one of those, but I’m working up to that as my goal. I believe my data set in identified properties is already larger, but it’s now a question of historical track record to be as significant as theirs. I’m already more than one-quarter deep into the data set; I’m getting pretty deep.
If and when development picks back up, and you’re called to do more work with Criterion, what happens then?
I’m going to stick with [BAA]. I know that. I want to stay independent, that’s important. But the degree of independence, that’s to be determined. Right now, my clients are developers. I come from an academic background, but I’m not a pure academic. So some of the things that I’m going to get into, and that I’m already involved in, like the [Chapter] 40b [affordable housing statute] debate and things like that, I won’t be able to disguise my background or my position, no more than anyone from CHAPA or any of those organizations try to disguise their position on any of those topics.
What is your position on 40b?
I’m pro 40b, but I do think it could use some change. I think it needs some healthier discussion and a healthier debate. I want to add to that debate. But until local towns actually provide multi-family zones, it’s needed. For the region to be competitive we need multi-family development. Where the friction is on the town-by-town, block-by-block, and that’s where we need more analysis.
What do you think about the 40r and 40s overlay zoning program?
I think it’s a very good program. I think developers, because I know developers, have been worried about the hurdles and the potential that the funds aren’t there in the end. The towns are worried about that, too; that the state is not going to fund all the reimbursements. That uncertainty has made it a less useful tool than it probably could be. There are some good 40r zones out there that probably in the next cycle will have some really exciting development.
James Pennington’s Five Favorite Places other than Boston:
1.) Paradise Valley, Mt. – Because its name is apt. A slow raft down the river there is a life changing experience.
2.) Grey Smokey Mountains, Tenn. – It’s an old mountain range that is home in many ways to me.
3.) Squam Lake, N.H. – I’ve had some of my best vacations there with my young family and in-laws.
4.) New York, N.Y. – It is New York. What else can you say?
5.) Acadia, Maine – It encompasses all that I like about the mountains, lakes and the ocean.
