Brad Cangiamila | 6 Boston Developers to Watch in 2023

NAME: Brad Cangiamila

COMPANY: Crest City Capital

Growing up, did you always imagine getting into real estate in some capacity?

I grew up north of Boston. Starting at a young age, I was always around real estate. I would work summers with my father who was a builder. I enjoyed real estate so much that I wanted to pursue it as a career right after high school, but my dad advocated for me to get an education first. I graduated college in the early 2000s and pursued a full-time career in medical sales in NYC. I always knew real estate was my calling– I was invested in a few projects after graduating, but September 11, 2001, changed the world in so many ways -- it was tough to establish deal flow. I was also in my early 20s.

Can you talk about balancing the full-time job in medical device sales while getting your feet wet in real estate?

I dabbled in real estate as a passive investor when I lived in NYC. When I moved back to Boston in 2012, I started planning for my transition into development full-time. I understood the Boston market and was fortunate to have a vast network of friends, professional connections, and family.

While working in medical sales, I was investing part-time, doing one to two projects a year, and focusing on building solid relationships with people in the real estate business. Eventually, one or two projects a year turned into 14. That’s when I knew my passion was on track to ultimately transform into a company – that was my goal, and I was determined to reach it.

How did you get those first couple deals?

I dedicated my nights and weekends to real estate. Time management and planning is huge when making this sort of transition. 

Real estate is a rewarding business, but it is risky. It was a grind in the beginning – I had the money to close on my first project but understood that in order to close quickly, it’s advantageous to have no financing contingencies. I was willing to put my own capital forward, but ultimately found an investor. After 14 projects, I had 14 different investors in just one year. 

Momentum is a motivator and I just kept moving forward. It’s ironic, the first week after my first son was born, I quit my day job; my wife was like, “What are we doing here…?” But this was a tipping point, as my family was growing, there was no choice but to make this company that I was building a success. 

14 projects in a year? How?

Organization, sales experience, a finance background and a thorough understanding of the development process certainly help. The numbers and the market also made sense – it was an opportune time. 

I maximized volume while maintaining great returns. Real estate is cyclical so moving when the iron is hot is key to success. 

I also started to record a salary through my development work while working in medical sales as I knew the banks would want to see income recorded before financing projects.

I started doing 1 or 2 deals per month. I was in Somerville; I was in Dorchester. Not quite in East Boston yet, but we were all over the map, setting the comps in many areas surrounding Boston. 

Were these renovations?

In the beginning, most of the projects were three-family renovations. Renovations present a little less risk when compared to ground-up projects. We knew the budget and the market, but never underestimated the importance of partnering with local agents, especially in neighborhoods where the comps change drastically from block to block.

What was your process for picking a neighborhood to go into?

Originally, we focused on transit-oriented locations and intuition. There’s a lack of supply of housing in Boston. 

In your first year, you did 14 deals with 14 different investors. Was that intentional on your part, or is that just how it came together?

I feel fortunate that I never had to directly pitch or cold call any investors. I would talk to my network about what I was doing in casual conversations, they believed in what I was doing and wanted to get involved. 

People were pleased with their returns and didn’t have to contribute that much to invest, relatively speaking.

It sounds like you handled the transition from 9-to-5 to development very carefully.

I had a two-year plan to get to where I needed to be. It may sound cliché but when you bring passion to what you do, you naturally bring skills to your profession that others without passion may not possess – you are already at an advantage. My understanding of construction costs, finance, and the fact that I was doing real estate as a hobby before taking the leap certainly helped.

Was it at that point, when you made the leap, when you did a rebrand of Boston Common Holdings?

We rebranded to Crest City Capital in 2021. 

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Can you speak to how you juggle all your projects?

In the past two years, we’ve hovered around 30 – 40 projects and are on a path of growth. We have immense trust in our builders, lawyers, and architects who consistently hit their timelines. It takes time to create and cultivate the right partnerships but once trust is earned, it saves an immense amount of time.

Yeah, on that note — how do you separate the decent real estate agents from the great ones?

Agents that are resourceful and send properties with sellout projections. We also appreciate it when they know a given property’s sellout numbers and bring us off-market deals. We don’t always look for the highest price asset. We like to see a variety of properties and the math behind them to back them up. Agents that can effectively set pricing precedents with sellers are also far more effective.

What are the qualities of those agents who you’re picking up their phone calls every time?

They thoroughly understand the financial components of the deal. They know the comps. They know if the seller is serious or close to it. They are not just forwarding something from another agent.

What’s your breakdown like for selling versus doing rentals?

Last year, we had 40+ projects under development. We are currently building around five or six for rent projects in the Boston area. We acquired 230 units in 2021 in bigger rental buildings that have 100 + units each. We doubled that count in 2022 closing on 400 Units. Our last acquisition was a $25 million multifamily value add property.

So, on a units basis, it’d be a much larger chunk, but if we’re going by just the percentage of deals, it would be smaller.

Exactly. And the market’s a little different than it was a year ago. We are picky about which projects we pursue. We’ve shifted over the last year or so into more multi-families that drive returns for our investors. There are bigger margins in development deals. Rental buildings can be much more predictable. 

Got it. How are you navigating the macro environment right now?

We’re focused on emerging markets that have strong education, job, and population growth. Interest rates have slowed things slightly but we’re still hitting our numbers. There’s still a huge lack of inventory. We’re also entering markets beyond Boston like Atlanta and the Carolinas.

What are some of the pitfalls for people who try to make the leap to full-time developer but aren’t quite able to?

We were fortunate that we launched during an extremely strong market, but a few tips that apply to any market include: 

You have to be conservative, but willing to take risks. It’s all about the numbers and don’t underestimate the important of planning.

I passively invested first so that I could understand the business a bit more. There are a handful of people who passively invested with me early on for learning purposes – consider that avenue.

Build a strong foundation while leveraging your own personal support system. My dad was a great resource balancing my determination and optimism with his view on the worst case scenario. 

I also want to stress the importance of building relationships with banks, architects, builders, and zoning attorneys etc.

Is fundraising fairly straightforward for you at this point?

Right now we have over 100 investors. Before, it was mostly friends. Now, we have a variety of investors from family offices and overseas interest. People who have been happy with their returns, want to invest again. We have a lot of returning investors. 

What’s your favorite part of the entire development process?

Acquisitions. Finding a deal is always exciting. Also going to community meetings and getting the vote to move forward. Those meetings are very complex and its always rewarding to get the community’s approval on a plan.

Anything you haven’t done that you’d like to get into?

We’re expanding into the multi-family and assisted living. 

I would think that’d make it significantly easier to move on a deal, not having to corral investors.

We’re lucky - often times our fundraising efforts involves a few phone calls. 

Are there things, compared to even a few years ago, that people are looking for more now than they might’ve back then?

Real estate typically goes back to the basics, but you have to master them: parking, outdoor space, amenities, finishes, location etc.

Here’s a hypothetical: Imagine the year is 2033. There’s a hot new neighborhood or town in or near Boston that is overlooked today, in 2023. What do you think it is?

Worcester presents superb infrastructure. It’s 45 minutes from Boston and pro-development. 

Before we wrap up, can you talk a bit about the development you’ve done outside of Boston?

We’re in Maryland, Atlanta, Raleigh, Charlotte, the Carolinas, Florida, and Massachusetts. When we see a property with potential in a great location that’s also close to retail and restaurants, we move quickly. We are currently working on something in Delray that possesses all these core elements.

I’ve stayed in touch with many people over the years that live in different parts of the country. Nothing happens overnight. A conversation at a conference may lead to a deal three – five years later. I never limit myself to one geography and pay most attention to the market dynamics, and population/job growth.

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