Name: Richard C. Muraida
Title: Lending Center Manager, Commercial Banking Division, Rockland Trust
Age: 57
Industry Experience: 33 years
Texas native Rick Muraida moved to the Boston area for school and, like many before and after him, wound up staying on after he completed his studies. He got an introduction to banking through a summer job and started in commercial banking in the lending servicing function. Two years ago, he joined Rockland Trust as it set its sights on the Boston market. When Muraida isn’t banking, he enjoys attending concerts – particularly classical music.
Q: How do you see the rise of Millennials in the work place starting to impact trends in commercial real estate?
A: In this immediate area, there’s more high tech space right across the street. Yahoo and some other tenants have large spaces, and they hired Millennials. When you look at their build-out and you look at their space, you see that it’s all computer-oriented, high-tech stuff – whiteboards and collaborative work space, high tables. You don’t have a build-out like this with cubes and offices.
The space requirements have changed quite a bit. Tenants are taking less space because the average square foot per employee is reduced. It used to be a standard [that] you had probably 250 feet per employee. Now maybe it’s 150. There’s much less need for individual space. They like to be together. It’s just a totally different usage of space, and there’s a lot more telecommuting.
Therefore, when you think about vacancies in the marketplace and you see office vacancies, in this market, in this downtown Class B space, there’s less than 5 percent, or maybe around 5 percent, and that’s probably where you are in terms of equilibrium because the rents are rising.
If you go further out, 128 and 495 and you see those vacancies, it’s 15 to 20-plus percent. They typically say X square feet of vacancies represents Y number of jobs, but the requirements for tenants being even less, that’s even more jobs to fill the same amount of space.
It’s interesting because one of our customers who works primarily in the downtown office space said to me, “I don’t really think the suburban office space is overbuilt. It’s under-demolished.”
Q: I’ve been hearing a lot of murmurs that we’re approaching another recession soon. You’ve been in this business for a while – what do you think?
A: You know, it’s interesting, there’s so much more transparency of information. You can see Janet Yellen virtually every day, and there’s so much more information that’s readily available than there was years ago – and there’s much more liquidity, too.
It may be much more of a gradual slowdown than a more severe downturn. I think everybody would agree we’re closer to some sort of slowdown than to continued recovery.
Q: Where do you see bright spots for Rockland Trust in the year ahead?
A: What’s interesting is affordable housing. That is a sector which is somewhat recession-resistant in the sense that in an up market, resident tenants get priced out of units, so the need for affordable housing is exacerbated. In a down market, where you have higher unemployment and underemployment, there’s greater demand for affordable housing; so up or down, there’s a tremendous demand for it. The challenge is public resources, the allocation of state and federal dollars, is very competitive, but the fact that there’s a demand for it means there’s an opportunity to finance acquisition and rehab of existing properties.
There’s production and there’s preservation, and both of those activities are challenged. Production is challenged because that represents new capital to be able to buy land and build new and still maintain it as affordable at 60 percent of area median income.
The preservation is important because that’s inventory that’s been developed over time that you don’t want to lose because unless you’re producing inventory, you’re losing ground. You have to be as active on the preservation side, almost, as you are on the production side.
There’s a lot of activity in both. There’s more competition for the production side. As far as the preservation side, with tax exempt bond financing and tax exempt credits, there’s a steady pipeline, but it’s not unlimited. All these resources are in finite supply. It’s a challenge, but it presents an opportunity for us to refinance.
When I first came to the bank, one of our initiatives was to increase our activity in that space because we were somewhat ad hoc and we needed to rationalize a strategy and approach it in a somewhat strategic way. So that’s I was doing for the first 18 months, getting us more visible in that market. We did some investing in that area. We hold some tax credits, which have turned out to be pretty good, and we’re starting to do tax-exempt bond financing as well. It’s an area I’ve been involved with at various places in the past and there are folks at different banks in town that have very active groups that specialize in that.
That’s the challenge for us – how do we identify ourselves as having the capacity to do that versus those that have been doing it for a number of years? And we’re getting there.
Muraida’s Top Five Buildings In The City Of Boston:
- The Berkley at 400 Boylston St.
- The Old Boston City Hall
- The Boston Athenaeum on Beacon Street
- The Grain Exchange Building near the Rose Kennedy Greenway
- The Boston Harbor Hotel
