The ever-changing development landscape of Boston requires developers to be resourceful and agile as they adjust to countless challenges such as new energy and building codes and a tough financing market. While historically Boston has seen a group of big-name players leading the development game, a new crop of firms have started to make their impact known.  In this series, BLDUP speaks with Boston’s Next Generation of Developers to discuss how they got their start, what makes for a good project, and their thoughts on the future of development in the city.

In our second installment, we highlight Adam Burns, Owner of Burns Realty & Investments. Founded in 2012, BRI operates on two core values, dedication to their clients and their team. Every member of the Burns Realty & Investments team shares in the company's success and is encouraged to help one another for the greater good of the client-agent relationship. Burns has grown from early days purchasing triple-deckers in South Boston and Dorchester to now developing larger projects including a high-rise lab project in Somerville.

BLDUP: How did you get into real estate development?

Adam Burns: As far back as I can remember I have had an interest in real estate and construction. Whether it was building structures with blocks and Legos as a young child or watching HGTV as I got older, real estate was always a fascination. It might sound corny but while some kids dreamed of a new BMX bike or the latest VH1 craze I dreamt of owning my first property. 

Growing up in Rochester, NY the barrier to entry into the real estate market was quite low. In my auto body shop in high school, I learned to work on cars. I spent my entire life savings, socked away from the odd summer job, to purchase a 1969 Ford Mustang. After pouring my blood sweat and tears into that car it sold for a handsome profit. I purchased, repaired, and resold a number of cars until I had just enough to purchase a 2 bedroom condo in East Rochester, NY for $48,000 and became a landlord in my late teens. I purchased more units in the same condo association over the following years, bribing my friends to help with renovations on holidays and weekends throughout college. I wouldn’t trade those years for anything and I learned so much about the fundamentals of how a building goes together and what it means to be responsible for someone else’s fundamental need for shelter. 

I attended Union College to study computer engineering and landed a job in Boston working in financial technology but found out very quickly that real estate still had my heart. So I did what any impulsive 22 year old would do - I went out and got my real estate license, liquidated my Rochester real estate holdings, and quit my job to pursue real estate as a career. I began purchasing triple deckers in South Boston and Dorchester as condo and rental projects while working as a full time real estate agent doing any transaction that would pay the bills. Many lessons learned and just over a decade later here we are. 

I have an amazing team that all works toward the same vision of creating safe and comfortable housing for Boston residents. We are now a fully integrated real estate service group offering services in development, brokerage, construction and management under our different brands. The scale might be a little different today but the principles and passion are the same. 

BLDUP: What makes a “good project” or investment for Burns Realty & Investments?

Adam Burns: It’s all about the numbers. We let our underwriting speak for itself and we will never “chase” a project or try to fit a square peg in a round hole. We have an amazing team that does significant research and modeling for each project before we ever decide to pursue it and we base our decision making on the hard facts.

BLDUP: What challenges do developers face in growing from small projects to larger developments?

Adam Burns: Patience. 

Truth be told this is something that I still struggle with. I would love to build the next building that defines the Boston skyline but that is not realistic. It takes time to build into the ability to execute on larger or more complex projects. It takes patience to go from renovating existing dwellings to building ground-up. It takes patience to go from building your first 3-family to building 20 units. And it takes patience to enter a far more complex or lengthy permitting process. As you scale up, so do the timelines and your patience will need to scale accordingly. 

It takes time to build the team and the knowledge necessary to grow in scale and that doesn’t happen overnight despite what social media would have you believe. 

My greatest advice on this topic would be to focus on consistent growth from project to project and to not bite off more than you can chew in an effort to get there faster. If you are renovating now, then try to build a similar sized building ground up. If you are building from the ground up, then try to scale up the unit count on the next one. This progress will build a track record of success that you can share with your lenders and lay out a clear justification as to why you are capable of scaling up. 

BLDUP: Thoughts on the future of Boston development given new regulations (energy efficiency, affordable housing, etc)?

Adam Burns: The changes being made by the City of Boston will certainly add costs to development through the energy code changes while also narrowing the margins by requiring greater affordability. These changes are coming at a time when the interest rate environment has already made project economics challenging but if these changes come with the benefit of greater permitting clarity and a streamlined process we will be better for it in the end. 

That is not to say that these changes will not have a short-term negative impact because they will absolutely slow development in the near term. Until markets adjust we will see less housing being built in Boston due to these policy changes coupled with the broader economic conditions. 

BLDUP: How have current market conditions (rising interest rates, construction costs) affected your pipeline?

Adam Burns: Fortunately, we have seen some normalization in construction material costs and lead times as COVID-induced supply chain issues have abated but inflation and rising interest rates have presented new challenges. 

We have seen our margins shrink dramatically on projects that were under construction as rates began to rise but fortunately, we had the room to absorb the shock to those projects. We have continued to underwrite new deals from the same conservative position which has lost us more deals than it has won us. So far the greatest challenge we are seeing is a lack of expectation shift on the part of sellers but this is slowly changing. 

To date, we have seen sellers' expectations strongly rooted in the “well I was offered X last year” mentality. As news and media begin to report more on the shifting economy we are seeing more sellers begin to understand that the prices of last year or two years ago just can’t be supported by today’s reality. 

The truth of the matter is that the capital required to build these projects is much more expensive today and thus a developer simply cannot pay what they could pay before. Some sites don’t even work if you were given the land for free so we will absolutely see a reduction in new housing deliveries as the new math proliferates through the market. We believe that this will work counter to the efforts being made to reduce inflation as supply becomes further constrained. More approved projects are being sold now than ever before and a vast majority will never be built.

BLDUP: What project(s) are you most excited about?

Adam Burns: Real estate is an amazing industry for many reasons but I personally enjoy how every transaction or development is different from any other. Recently I have found that I derive greater enjoyment from the projects that either push the limits of our capabilities acting as a catalyst for our growth or the ones that take us outside of our multi-family box and into other asset types. Two projects in particular spring to mind:

High Rise Incubator Lab Building

In Assembly Row, we are picking our way through the permitting process to construct a 125’ tall building that will house budding lab companies. We are proud to be partnered with Boston Lab Services to employ a business model that will allow these young companies to grow in space and services required within the development. 

90-Unit Transit-Oriented Development

Near South Bay Plaza we are excited to be permitting the future home of a long time South Boston business, Crossfit Southie, accompanied by 90 residential units with rich amenities. Crossfit Southie will occupy the first floor commercial space flanked by a new pocket park ensuring that this small business can continue to grow and thrive in the community where it all began.

BLDUP: Burns Realty & Investments offers a full suite of services including construction & property management, walk us through how you decided to branch out into other areas of the CRE industry (and discuss how this sets your firm apart).

Adam Burns: It is correct that the Burns Companies do offer a holistic approach to real estate services that is unique to our market. Being in the business of brokerage, management, development, and construction offers our clients the benefit of all that collective knowledge, a seamless experience, and significant cost savings.

Brokerage clients can benefit from our construction services to improve their home before listing and pay for the renovations at closing. Management clients benefit from a robust list of vendors who often provide volume discounted pricing due to the work they receive from our construction company. Construction and development clients alike enjoy the insights into what makes a property rent or sell for top dollar that can only come from active participants in the Boston real estate market. 

We offer all of these services because each of these touchpoints is involved in a successful project. A project needs to be identified (Burns Realty & Investments LLC), permitted (Boston Pinnacle Properties LLC), Constructed (Synergy Construction Group LLC), stabilized/sold (Burns Realty & Investments LLC), and managed long term (BRI Management LLC). Each company was formed as we realized that we either would need to hire out for someone else to do these things or we had to find a way to do it ourselves. A lot of the time we had terrible experiences when hiring out construction, brokerage, or management services and it became clear that we needed to bring these things in-house to achieve our standards.

BLDUP: What are your goals for the company in the next 5 years?

Adam Burns: Continued and marked growth in project size and complexity throughout the Greater Boston Area. We do plan to expand to other North Eastern markets once our target deal size reaches a critical mass. What I mean is that there are only so many projects of a certain size and scale within any one metropolitan area so within the next 10-15 years we expect that there will come a point that, in order to keep growing, we will need to consider additional markets.