Revere Mayor Patrick Keefe surveys the northern entrance to the Suffolk Downs property from a terrace at the 475-unit Amaya apartment building, the first to be completed within the development approved for over 16 million square feet in Revere and East Boston. Photo by Steve Adams | Banker & Tradesman Staff
Revere has once-in-a-generation opportunity to redevelop a fading racetrack property as a miniature city balancing over 5 million square feet of new multifamily housing and commercial development.
The first building within HYM Investment Group’s Suffolk Downs redevelopment is nearing completion near the MBTA’s Beachmont station: a 575-unit apartment complex named Amaya with studios starting around $2,400.
But half of the 5.2 million square feet of development approved in Revere is earmarked for commercial projects, reflecting city officials’ vision of attracting thousands of well-paying jobs to the 52 acres located within the city’s borders.
“We don’t want to have just one industry in our community, because we know that they’re never recession proof,” Revere Mayor Patrick Keefe said. “The ebbs and flows of the economy are always going to impact us so if we get hit in one sector, we’re going to have to be able to have a diverse portfolio and different types of enterprises in our city.”
Change in City’s Trajectory
Keefe and his predecessor, Brian Arrigo, saw an opportunity to tap into the past decade’s development boom in asking developer HYM to include a sizable commercial component on the 52 acres located within the city’s boundaries. They saw an opportunity to bring life science and tech jobs to a city that attracted several new waterfront multifamily projects, but has historically seen limited commercial development despite its subway line.
HYM responded by designating the project’s first commercial site for a pair of red-hot industry sectors: life science research and biomanufacturing. As completion of the first apartment building nears, the timetable for commercial projects is uncertain as developers wait out an industry downturn.
“We went into this in 2022 which was sort of the old days of low interest rates, and the challenge for all of us right now is to manage the current interest rate environment,” said Tom O’Brien, managing partner of HYM Investment Group.
HYM Investment Group has leased 20 percent of the apartments at the 575-unit Amaya complex, the first building nearing completion at the Suffolk Downs redevelopment. Image courtesy of HYM
Unfortunately for Revere and other cities with dreams of tapping into the region’s recent biotech boom, biomanufacturing has failed to deliver on its promise of leveraging the Bay State’s life science research cluster. Employment in the sector grew in just one region statewide – Worcester County – during 2023, according to trade group MassBIO’s annual industry report.
And site work on the 525,000-square-foot life science and biomanufacturing building at 100 and 150 Salt St. was paused in 2023 amid the region’s growing glut of unleased lab space. The life science vacancy rate is over 20 percent throughout Greater Boston, according to brokerage data.
Interest Rates Weigh on Financing Deals
Against that backdrop, timing to break ground on the second apartment building and resume work on the life science-biomanufacturing complex are still uncertain.
The Amaya building is 20 percent leased at rents of nearly $5 per square foot, according to HYM, and the complex is marketing entry-level studios starting from $2,425 per month.
HYM and its equity partners obtained $150 million in construction financing for Amaya from Ullico, a union-backed life insurance company, in September 2022. The 475-unit complex across the street from the MBTA’s Beachmont station is equipped with the sort of elaborate amenities package now prevalent in class A apartment buildings, from two courtyards equipped with grills and weightlifting equipment, to co-working nooks and a third-floor lounge with outdoor terrace.
Site work on the 525,000-square-foot life science and biomanufacturing building at 100 and 150 Salt St. was paused in 2023 amid the region’s growing glut of unleased lab space. Photo by Steve Adams | Banker & Tradesman Staff
But HYM is struggling to make the financing numbers work to break ground on Portico, the 473-unit second apartment building, which would be located on a development pad located just northwest of Amaya, O’Brien said. HYM declined to give cost estimates for Portico.
The lack of progress on additional buildings has attracted concern from Revere city councilors, given the developers’ estimates that the development could eventually generate up to $43 million in annual property taxes.
Developers had projected the full buildout at approximately 20 years even before the commercial real estate industry entered a downturn in 2022 amid interest rate hikes and inflation-driven project cost increases.
Industrial Transformation on Route 1A
Amid these concerns, Keefe points to commercial development opportunities emerging on the opposite side of Route 1A, driven by the market’s transition away from fossil fuels.
Steve Adams
Link Logistics, an industrial arm of private equity giant Blackstone, acquired the 44-acre Global Partners tank farm in 2022 for $150 million. Its partner Saracen Properties received approval for nearly 368,000 square feet of industrial space at a project known as Trident Logistics Center, having recently completed demolition and environmental remediation, Revere Chief of Planning and Community Development Tom Skwierawski said.
While O’Brien points to Revere’s MBTA Blue Line access as a key asset in competing for future commercial development, local officials are pushing for transportation upgrades to catalyze growth elsewhere in the city.
A $5 million study beginning this fall will study the potential benefits of a commuter rail station at the old Wonderland dog track site, adding a second transit link to an area already home to the Blue Line’s terminus.
In an Aug. 1 presentation to the Boston Region Metropolitan Planning Organization, which makes recommendations on how federal and state transportation funding is spent locally, Skwierawski contrasted the project with the long-suggested extension of the MBTA Blue Line to Lynn, arguing that the Wonderland connection is a more cost-effective approach to connecting commuters from the north directly to Boston’s Logan International Airport, although the commuter rail and Blue Line tracks are over a quarter-mile apart..
“It really does provide some regional transit benefits,” Skwierawski said.
