Low interest rates are the market’s lone source of opportunity, says Zuckerman: VIDEO
If there’s opportunity in the current real estate market it’s all manufactured by the Federal Reserve, Boston Properties Chairman Mort Zuckerman said in an appearance yesterday on Bloomberg Television’s “Street Smart” (see video above).
Zuckerman, who regularly touts his companies focus on “A buildings in A locations,” said his portfolio is not being bouyed by growing rents, rather by the low interest rates. Zuckerman said the board at his company was able to secure $1 billion at a 3.85 percent interest rate over more than 10 years.
“I’ve never seen those kinds of interest rates in my career,” Zuckerman said. He attributed Boston Properties’ recent strong earning reports not to higher rents, better occupancy or a generally improving market, and instead credited the low interest rates available.
Meanwhile, the company has shifted much more of its focus to buying assets rather than developing them. “We’re doing a much less intensive development program because that’s more dependent on a stronger market,” the developer said. — Adam Fusfeld