Brad Cangiamila
Founder and principal, Crest City Capital
Age: 44
Industry experience: 24 years
After a decade-long career detour in the New York City medical device industry, Brad Cangiamila returned to his native Massachusetts and put his real estate connections to work at a new multifamily investment and development firm that he founded in 2016. After starting out acquiring triple-deckers in neighborhoods such as Jamaica Plain, Cangiamila’s Crest City Capital has completed projects ranging from luxury home construction in Wellesley to renovations of Beacon Hill condominiums and acquisitions of apartment complexes in the Sunbelt. Crest City Capital acquired $65 million in assets in 2022, while selling properties worth $50 million. Along with its development projects in and around Boston, the firm has acquired stabilized properties in the Carolinas, Florida, Georgia and Maryland.
Q: What are the main focuses of Crest City Capital’s business model?
A: For the development piece, the model is build-to-sell, and maybe build-to-rent in Boston. We’ve done projects from single-family homes in Wellesley to 30-plus units in Dorchester, and everything in between in places like Somerville, Boston, East Boston and Beacon Hill. We’re open to doing up to 100 units where the numbers might make sense. Boston is still a great market. It’s very self-protected. There’s not much land, so it’s tough to overbuild. The rent-stabilized value-add plays are usually outside of Boston. It’s a little easier to have the numbers pencil out. Demand in Boston is very high, and it’s tough to acquire things. Investors base their numbers in Boston on [rent] projections. Outside of Boston, we focus on job growth, population growth and emerging markets in areas centered around education, such as Charlotte, Raleigh and Atlanta. There are some concerns we have in Raleigh: It’s similar to Boston in terms of life science companies and high median income. There’s a point where they could potentially overbuild for the people coming in.
Q: What are multifamily investors facing in this year’s changing lending environment?
A: For sellers, if their property was worth $100 million, and now it’s worth $80 million, it’s time they come to terms with being able to let that go. We’re still looking aggressively at these deals, but we don’t see a lot of those multifamily opportunities coming up in the next eight months or so. For development, it’s tough to get a fixed interest rate. Luckily we’re diversified in these higher-end markets. Even with rates going up, we were still profitable and investors were happy with their returns.
Q: Do you find many of your sites off-market?
A: Absolutely. We build a lot of relationships with amazing agents. Off-market just makes the most sense, especially in the market where all of the developers are going after the same things, and things get bid up. They send us [listings], they know our numbers, so they’re not forwarding a lot of these projects without knowing our numbers. Also, we do direct mailers in certain areas.
Q: What local neighborhoods would make sense for your next expansion?
A: Quincy is a great town to work with in terms of getting variances and expanding into multifamily. Weymouth is that next spot we haven’t gotten involved in, but we’re looking at more opportunities there. And recently we recently got involved in Worcester. They have great infrastructure and they are pro-development. It’s nice to deal with a town where there’s less butting of heads.
Q: On the consumer side, how do interest rate hikes affect sales prices in the markets where Crest City Capital is active?
A: We’ve found that above $4 million, we haven’t seen prices drop too much. Buyers are less affected by interest rates. There’s not much inventory in Brookline and Wellesley. We have a few projects on Beacon Hill, including one that we just acquired off-market, and just got rehabbed and turned into two condos. We put that on the market and got accepted offers the first week at asking [price]. We also acquired a 9,000-square-foot brownstone on Chestnut Street in Beacon Hill, and we’re looking to do a single-family, potentially in the $20 million range. And we’re done over 40 condos in the East Boston market. There was some softening in the market at the end of last year, and then things picked back up. I grew up in that area so I know that market and it’s here to stay. It’s great if it’s an existing building and we can renovate for condos, whereas permitting is a wild card and things that used to take two to three months might take a year to get permitting now. Renovation is a quicker permit.
Cangiamila’s Five Favorite Eateries in Crest City Capital’s Market Territory:
- Toscano in Beacon Hill
- Meridian Market in East Boston
- Cafe Mangal in Wellesley
- Greenhills Irish Bakery in Dorchester
- Miss Worcester Diner in Worcester
