Winthrop Square.
Trendsetting office space, high-end residences and ambitious university and hospital building projects will contribute to nearly 8 million square feet of construction completions in Boston in 2016. In the suburbs, developers are taking the wrecking ball to aging office parks to make room for hotels, apartment complexes, restaurants and retailers.
The strong absorption of the current wave of development has bolstered investors’ confidence in Greater Boston as one of the nation’s strongest commercial real estate markets. Demand for new commercial and multifamily space is showing few signs of abating in 2016, with the next group of major projects set to make headlines in the New Year.
Winthrop Square Tower, Financial District
For the city of Boston, a rundown municipal garage turned into a liability after it closed in 2013 because of structural deficiencies. But the 1.1-acre parcel at 115 Federal St. could provide a hefty windfall, with developers willing to pay $100 million for the right to build a signature skyscraper in the Financial District, according to a Boston Finance Commission estimate.
Eight developers submitted proposals in April for the site, with various plans that would include some combination of housing, offices and hotels. Developer Steve Belkin proposed a 1.5-million-square-foot development, which would be cantilevered above the 133 Federal St. office building he owns on an adjacent parcel. Boston-based HYM Investments suggested a land swap
that would move the St. Anthony Shrine to the garage site while building a 780-foot residential tower on the church property on Arch Street.
The process was put on hold after Boston city councilors balked at transferring the garage to the Boston Redevelopment Authority. That step was completed in December.
A review committee comprised of newly-appointed Director of Real Estate Ed O’Donnell and representatives from various city agencies will begin meeting in early 2016 to evaluate the proposals and meet with developers, BRA spokesman Nicholas Martin said. The goal is to designate a developer and complete the large project permitting review by year’s end.
“This could prove to be an ambitious timeline, but we ultimately want to be able to capitalize on the positive real estate market that we’re experiencing,” he said.
Midwood Tower, Downtown Crossing
Midwood Tower site.
The revitalization of Boston’s Downtown Crossing hasn’t gone unnoticed by New York-based Midwood Investment & Development, which has owned a key block of parcels diagonally opposite the Millennium Tower for the past decade.
Midwood put plans for a 28-story tower on hold during the recession but met with BRA staff in mid-2015 to discuss its plans for a condo and apartment skyscraper in the 700 foot range at 1 Bromfield St., replacing a block of low-rise retail buildings. The project would join a neighborhood that has bounced back from the departure of Filene’s with signature retailers such as Primark and Roche Bros., and become a landing spot for creative and tech office tenants, including Havas Media and audio equipment manufacturer Sonos.
NorthPoint, Cambridge
NorthPoint.
A change of ownership could serve as the catalyst for progress on 2 million square feet of permitted commercial development at NorthPoint, the long-delayed mixed-use project spanning 45 acres on the Cambridge-Somerville border. San Francisco-based DivcoWest acquired the former rail yard property in August for $291 million.
East Cambridge is one of the most sought-after commercial markets in the U.S., with the nation’s 10th-highest asking rents, and commercial users in the market for more than 3 million square feet of office and lab space. Vacancies in Kendall Square are under 4 percent, forcing life science users with short-term requirements to consider locations in Alewife or suburban markets.
NorthPoint’s ability to break ground on a speculative or build-to-suit project in the short term could give it a crucial advantage over other major projects on the horizon in East Cambridge, including MIT’s Kendall Square Initiative and Boston Properties’ proposed 600,000-square-foot commercial development.
Needham Crossing
Needham Crossing.
Single-use office parks have fallen out of fashion, so developers increasingly see opportunities redesigning these suburban properties in mixed-use formats including housing and retail. In Needham, Normandy Real Estate Partners is set to move forward with the next phase of its 27-acre Needham Crossing development, which will include a 128-room hotel, 390 apartments and 423,000 square feet of office space. Appliance maker SharkNinja already has leased 150,000 square feet and will relocate from 180 Wells Ave. in Newton. The Needham Crossing office space will be renovated in early 2016 following the departure of General Dynamics Mission Systems for 100 Rustcraft Road in Dedham, which itself is being redeveloped by The Davis Cos. of Boston.
The District, Burlington
The District.
The former New England Executive Park in Burlington is getting six new restaurants, a Marriott hotel and 21st-century office space designs to compete with urban properties after a partnership led by Newton-based National Development acquired the 1.35-million-square-foot, 13-building property in 2013.
Developers are marketing 140,000 square feet of existing office space in the park. An additional 260,000 square feet are available in 80,000 square feet of new construction and a 180,000-square-foot build-to-suit parcel.
Recently renamed The District, the decades-old property is adding new dining venues including a 268-seat Island Creek Oyster Bar and 150-seat Pressed Cafe. Life-Cycle Wellness will open an indoor cycling studio in The District’s fitness center this month and will provide in-house yoga and wellness programs for tenants. An addition, roof deck and glass facade are being added to the 11-story office building 7.
The changes have already begun to pay off, with a 15,000-square-foot expansion by software company Black Duck and arrival of tech tenants Trillium Software and Ping Identity, both of which relocated from nearby suburban markets.
