Remnants of the Industrial Revolution are getting a second life in the Boston suburbs as developers update former factories and mills for 21st-century workspaces and housing.
While they lack the trendy downtown addresses and easy mass transit connections sought by many New Economy tenants, the cavernous structures lend themselves to the open floor plans and flexible layouts favored among tech-oriented companies.
In downtown Waltham, a Boston developer recently completed the final phase of the 400,000-square-foot Watch Factory complex along the Charles River. Three miles downstream in Watertown, four new tenants have boosted occupancies in a 203,000-square-foot former woolen mill. In Maynard, developer Wellesley Management is looking to fill office space at Clock Tower Place, where approximately 30 percent of the 1.1 million-square-foot complex is available.
Dozens of creative firms have gravitated to the distinctive brick-and-beam architecture and historic bona fides of mill properties. Case in point: the Riverworks office complex at 480 Pleasant St. in Watertown, the former Aetna Mills wool manufacturing plant.
Andrew Kolidas, CEO of digital marketing agency Digital Impulse, said he didn’t have a mill complex in mind when looking for a new headquarters. But after touring traditional office buildings along Route 128 from Waltham to Needham, he didn’t think his company would fit in.
“You could be next to lawyers and accountants – not that there’s anything wrong with that – but for a digital marketing agency it didn’t feel right and it was pretty expensive,” Kolidas said.
After expanding the search into Watertown, Digital Impulse co-founder Jeff Mitchell toured Riverworks. Then he called Kolidas with the news: “This is the spot.” The company leased 2,597 square feet and will move in Feb. 1.
Another new arrival, sports marketing agency TRACS Inc., moved from Newton to a 2,422-square-foot space at Riverworks in late December. CEO Fred Treseler said he wanted a distinctive office with an open floor plan in the western suburbs.
After visiting four or five other properties, Treseler settled on Riverworks because of recently installed features such as a 24-hour fitness room and cafe.
“They’ve attracted a number of interesting companies into their space, so it creates a certain kind of culture here that’s very different,” Treseler said. “We wanted to attract young people to a vibrant young business in a space that’s fun to be a part of.”
Consisting of two mill buildings along the Charles River, the 195,423-square-foot complex was the headquarters of medical device manufacturer Boston Scientific in the 1980s. Boston-based developer Farley White Interests acquired the property for $4.4 million in December 2010.
Since then, Farley White has renovated the building, converting first-floor manufacturing and research-and-development space into offices. Other new features include a cafeteria and fitness center, an interior courtyard with outdoor seating and more than 100 new windows.
‘Cool Spaces’
With quoted rents in the mid-$20s, Riverworks is competitive with conventional Class A office buildings in the Watertown and Newton area, said Brendan Cohn, a vice president for Jones Lang LaSalle, which represents the landlord. Typically, the determining factor is not price but atmosphere, Cohn said.
“You’ve got your typical mix of Route 128 tenants but you’ve also got tech companies with engineers, and they’ve created really cool spaces,” Cohn said.
In Waltham, Boston developer Berkeley Investments is wrapping up the third and final phase of the Watch Factory complex, with 67 loft-style apartments set to be occupied in March. Berkeley acquired an ownership interest in the property in 2007.
Innovation has been interwoven in the property’s history, as the first factory in the U.S. to mass-produce watches beginning in 1854. Precision instrument manufacturer Panametrics occupied the complex for more than three decades ending in 2004, and Berkeley acquired an ownership interest in 2007 from First Republic Corporation of America.
Berkeley Investments President Young Park said one of the property’s prime advantages was its generous natural light, originally intended to help factory workers assemble watch components, but now valued by tenants seeking sunlit workspaces.
“In the office space we used maximizing the ‘daylight’ as an organizing principle,” Park said.
The first phase, completed in 2009, converted 160,000 square feet into office space that is 100-percent leased to more than a dozen tenants including tech companies, law firms and market researchers. The initial housing segment with 96 apartments in six building was completed in 2012. A third phase with 67 loft-style apartments will open in March.
Tax incentives sweeten the pot for developers at qualifying properties. Since 2004, the Massachusetts historic tax credit program has awarded $50 million a year in tax credits to developers who restore historically-significant properties as income-producing investments. Developers can receive up to 20 percent of the cost of renovations in the form of state income tax credits. To qualify, properties must be listed on the National Register of Historic Places or certified by the Massachusetts Historical Commission as eligible for the list. The program expires in 2017.
According to state records, Berkeley Investments put the cost of Watch Factory renovations at $114 million and qualified for $22.8 million in state tax credits.
In Maynard, Clock Tower Place is attempting to attract tenants with rents that are half the price of Route 128 properties and more common space amenities than small office complexes typically offer. The former Assabet Woolen Mill, and later Digital Equipment Corp.’s headquarters, Clock Tower Place contains 12 buildings totaling 1.1 million square feet. One of the buildings was rezoned for apartments in 2011, but housing construction is up to two years away, said Bill Sullivan, a vice president for commercial real estate brokers Avison Young.
For office tenants, shared amenities such as a cafeteria, Gold’s Gym, daycare and 120-seat conference center are major draws, Sullivan said.
“They look at it from an employee retention standpoint,” he said. “Companies want to have as much as possible under one roof, and (then) the happier their workers tend to be.”
In recent months, the complex has leased 25,000 square feet to four new tenants and an expansion by Acacia Communications Inc.
As might be expected with buildings that were sited for their proximity to rivers rather than highways, transportation tends not to be a strong point. None are located close to interstates. Shuttle buses connect the Clock Tower complex with the South Acton commuter rail station, while Riverworks is served primarily by an MBTA bus route. One advantage, Digital Impulse’s Kolidas said, is the adjacent Charles River bike path that offers cyclists a commuting option from Boston and Cambridge.
Email: sadams@thewarrengroup.com
