More than a year since the New Boston Food Market put its highly coveted 19-acre Widett Circle parcel on the market, a sale has been delayed by the wholesale food cooperative’s inability to find a replacement site close to its suppliers and clients. 

Now, the departure of a New England icon could offer the best opportunity yet for the produce and seafood wholesalers to relocate within the urban core. Framingham-based Atlantic Management is offering the entire 829,000-square-foot former Necco candy factory for lease. The building on American Legion Highway in Revere is the largest industrial space on the market in Massachusetts. 

Atlantic Management and VMD Cos. acquired the 50-acre property last year for nearly $55 million and opted to retain the existing 2-story manufacturing building that churned out Sweethearts candy and Necco wafers. Necco, which had signed a short-term lease, shuttered the plant in July following its sale to Round Hill Investments. 

Necco continues to remove equipment from the building in preparation for a year-end exit, but the property already has attracted interest from food-service companies, said J.R. McDonald, an executive managing director for Newmark Knight Frank which represents ownership. 

“With the proximity to (Logan) Airport, we’ve seen a lot of demand for airport food-related users, and so much of the (industrial) inventory has gone away, so this ownership wants to stay on that path,” McDonald said. 

Located about 3.5 miles from Logan via Route 1A, the property is by far the largest industrial availability in the urban core, and after that the options fall off dramatically. Other listings include 190,000 square feet at 175 McClellan Highway in East Boston, 113,000 square feet at 425 Medford St. in Charlestown and 90,000 square feet at 15-23 Sycamore Ave. in Medford. 

“Developers are absolutely scouring the area for land or building opportunities to make more functional for industrial users,” said Doug Rodenstein, a vice president at CBRE-New England.  

The Necco factory was originally completed in 1982 and includes distribution, production, storage and office space. The Revere city council rezoned the property last year to allow such uses as life science manufacturing, R&D and alcoholic beverages production along with traditional industrial use. And ownership is willing to break up spaces on the first floor to accommodate tenants as small as 150,000 square feet, according to marketing materials. 

McDonald declined to comment on interest by specific users such as New Boston Food Market, which did not return messages seeking comment on its real estate search. A source familiar with the group’s process said its produce and seafood vendors are pursuing sites separately, after failing to secure a combined facility. 

New Boston Food Market partnered last year with Boston Global Investors on a potential 148,000-square-foot development on Dolphin Way in South Boston’s Raymond L. Flynn Marine Park. The plan was shelved last spring because of costs related to flood-proofing the site and space considerations, the Boston Herald reported. 

Steve Adams

Industrial Demand Through the Roof 

Atlantic Management’s decision to retain the Necco factory as industrial space reflects the sector’s sudden resurgence in Greater Boston, driven by two major trends.  

Developers have continued to buy industrial properties for multifamily conversions, reducing supply and driving up rents. And e-commerce companies are looking for last-mile distribution space near population centers, competing with traditional industrial users. 

While new development remains an option, high land and development costs can make such deals prohibitively expensive. To justify costs, developers need to lease high-grade industrial space at approximately $25 per square foot, CBRE’s Rodenstein estimated. 

“Land is so expensive, a lot of people are selling it to a residential developer for a higher price,” he said. “For industrial developers to compete, it’s difficult to make the numbers work from a rent perspective.” 

Even smaller food wholesalers are finding the costs of industrial space hard to swallow, said Joel Miller, owner of Boston-based Perishable Management Services, a real estate brokerage that specializes in food manufacturing and distribution properties. 

“In an industry that used to fight to keep their brick-and-mortar at $10 per square foot, now you’ve got to be looking at numbers in the $20s,” Miller said. “The landlord has you by the balls and you don’t have a choice. Most of these people are afraid to go to the suburbs and not be in a synergistic environment. They trade back and forth (with each other) and sell to their neighborhoods.”