Jeff Dunne
Vice Chairman, CBRE
Industry experience: 42 years
Q: How deep was the bidding pool on The Reserve at Danbury, a 446-unit apartment complex that recently traded for $152 million?
A: For Danbury, $152 million is a large deal, so I would say probably about a third of what we'd normally get. Not many people want to invest that much in Danbury. If it were Stamford or Jersey City it would be more: the sweet spot is 150 or 200 units for multifamily, and as low as 25 or 30.
Q: What effects are you seeing so far from the Federal Reserve's recent interest rate cuts?
A: For leased properties, not a whole lot. It's going to be relevant to people doing a debt fund deal, or a floating rate deal: buy-to-fix or value-add. Their debt is based upon SOFR and SOFR is going lower, and it'll affect that in a positive way.
Q: How is listing volume trending in the multifamily sector?
A: Materially better than it was a year ago. Our pipeline for 2026 looks better and there's more people selling, more people comfortable with the rates where they are. They've gotten used to it. A lot of people kicked the can down the road, hoping to get the debt in the 3's. They are just accepting reality. Some people are forced to sell. Their loans are coming due with preferred or mezzanine debt behind it, and they can't take it out with a new loan. That's good for me, but they have to sell. For office, it's a whole different world. You're just hoping you can find a loan for most suburban office properties. If it had 70 percent debt, it's worth less than the debt, whether that be in Hartford or Stamford or Manhasset, Long Island or Summit, New Jersey. There will be a lot more office sales in 2025. We're in the second or third inning of that. Liquidity for financing is great in the multifamily space. Rates aren't where they were three years ago.
Q: You recently represented the seller of Stamford Towers at 680 and 750 Washington Blvd. to Lamar Companies and Real Capital Solutions for their first Connecticut acquisition. How competitive was the bidding?
A: Shallow. It's a really good location. We sold that above their debt so that was a win, but not a ton above their debt. We are saving on closing dinners, because no one wants to celebrate.
Q: Your current listings into a 66-acre development site at 1 American Lane in Greenwich. What is the development potential there?
A: There's two pieces to that. One is the 62,000 square-foot office building which is about 40 percent leased. Tishman Speyer, who owns it, secured site plan approval for 198 townhomes, so there will be an enormous amount of liquidity from that, because you can't find land to build townhomes in Greenwich. There will be less liquidity for the office. There's more permitting to do to put in septic and wells, but the key approval was getting the site plan approval from the town.
Q: In East Lyme, you have a listing for a huge 233-acre waterfront parcel that's been the subject of development attempts for decades. What might make sense for a project there?
A: [Middletown developer] Glenn Russo owns that and he has approvals in place for 854 multifamily units under [state affordable housing law] 8-30g: townhomes or multifamily rentals. The listing went active this summer and there's interest in it. It's just big. It's 233 acres. You could probably do almost 2,000 units, but it's easier to sell projects with 300 or 400 units. It requires a lot of work, a lot of infrastructure, and someone who is pretty substantial. There's potential for a mix of rentals, for-sale units and some age-restricted, too.
Q: What's your crystal ball for top market trends in 2026?
A: The biggest trend is you're seeing a lot of office product taken down, and redeveloped for alternative uses, mostly multifamily rentals and for-sale [housing]. And maybe a little retail. That trend is very serious. You'll see the supply of office products in the suburbs reduced in the next five years in a very material way. A lot of these buildings were built in the 1970s and 1980s, and they are pretty antiquated. People will prefer better infrastructure and just a better environment overall to attract and retain employees. And I think the second would be multifamily has radically slowed down because the deals don't pencil, given the higher construction costs and higher rates. You'll see less multifamily come on in the next two years.