Image courtesy of CUBE 3
BXP is seeking to develop a 312-unit apartment complex in a Lexington commercial district where town officials have been seeking to attract a wider mix of real estate uses.
The 17 Hartwell Ave. site has been owned by the office REIT formerly known as Boston Properties since the 1970s. It currently includes a single-story office-lab building and surface parking.
In their quarterly earnings call this week, BXP executives said they will be pursuing suburban apartment projects including Greater Boston and Virginia despite the high costs of multifamily construction. Wood-frame suburban complexes are still economically feasible, BXP President Doug Linde told analysts.
“Non-office likely potential properties in the Greater Waltham market as well as in northern Virginia are the places where you will probably see us being able to start things sooner rather than later,” Linde told analysts. “[Central business district] construction and CBD rents are much harder to pencil right now.”
BXP’s housing strategy lines up with Lexington officials’ attempts to attract more investment in the town’s office parks near Route 128.
In 2021, Lexington town meeting rezoned 260 acres along Hartwell Avenue and Bedford Street for taller building heights, seeking to attract reinvestment in the aging commercial corridors.
The BXP proposal, submitted this week to the Lexington Planning Board, calls for a 5-story, 312-unit apartment complex, 364-space parking garage and a 2,100-square-foot freestanding restaurant and amenity building on the 5.25-acre site.
Under Lexington’s inclusionary zoning policy, 15 percent of the units would be reserved for households earning a maximum 80 percent of area median income.
In the earnings call, BXP CEO Owen Thomas said the company plans to pursue housing developments on sites that it already owns, and seek joint venture partners for the projects.
“It’s no secret that there’s a shortage of housing, certainly affordable housing in this country broadly. And I think communities are a lot more interested in entitling housing projects today than they have been in the past,” Thomas said. “The obstacle is what you described, which is costs, which have gone up not only for materials but also capital, given interest rates.”
BXP’s current construction pipeline includes just two office buildings in New York City and Reston, Virginia, a total of five life science projects in Cambridge, Waltham and South San Francisco, and a pair of apartment buildings in Reston and Cambridge’s Kendall Square.
In its second-quarter financial report, BXP said its second-quarter office leasing totaled 1.3 million square feet, with strongest performance in East Coast market including Boston, New York and Washington, D.C.
