L&G’s U.S. Asset Management business and Taurus Investment Holdings have broken ground on an eco-forward apartment building in the Boston metro area, according to an L&G press release. It’s the first housing construction L&G’s Institutional Retirement business has funded in the U.S.
Located in Concord, Massachusetts — “a structurally undersupplied Greater Boston submarket,” per the release — the ground-up project will include 25% affordable housing in accordance with state guidelines. It follows L&G’s other recent multifamily investments, including The Alder in the Denver area and Arkadia West Loop in downtown Chicago.
Boston-based Taurus originated the development and will oversee work through construction and delivery, per the release. Callahan of Bridgewater, Massachusetts, is the general contractor.
L&G’s Institutional Retirement business is investing in income-producing multifamily housing in the U.S., namely in markets with durable underlying demand and structural under-supply that lack affordability, an L&G spokesperson told Multifamily Dive in emailed comments.
“The Concord development in the Boston market is an incredibly strong match to our strategy and is being executed in a high-quality market where new supply is structurally difficult to create and where housing is in high demand,” the spokesperson said.
Sustainability features
The project features an all-electric design and geothermal heating and cooling, as well as onsite solar expected to generate about 134,000 kWh of electricity each year, per the release. Taurus will work with EcoSmart Solution to achieve the project’s high sustainability standard — it is targeting Phius CORE 2024 — via energy analysis, system design and ongoing energy management.
For L&G, sustainability is fundamentally about value creation “for residents, investors and the community,” according to the spokesperson. The firm seeks out ways to reduce energy consumption and improve building systems across its multifamily portfolio, and in Concord, “that strategy is being incorporated from the outset.”
“By embedding energy performance into the design and asset-management strategy from the outset, we believe we can improve operating efficiency, reduce owner and tenants costs, and possibly enhance the long-term value of the investment,” the spokesperson said.
Construction is expected to begin this year, per the release, with the first building expected to be complete by the end of 2028 and the second wrapping up in 2029. To make the project a reality, L&G overcame significant headwinds, including construction costs and capital availability, according to the L&G spokesperson.
“Construction costs have remained volatile, which makes locking in a final contract more complicated,” the spokesperson said, while “debt markets are more constrained and there is simply less capital available for new development. The unfortunate consequence is that fewer units get built, which only compounds the affordability and housing availability problem.”
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