Hunneman Commercial Co. is preparing to relocate to 303 Congress St. (pictured above) in Boston’s Fort Point Channel area, which has struggled as a bourgeoning office market.
In a move that could provide a boost to Boston’s Fort Point Channel market, Hunneman Commercial Co. is preparing to relocate to 303 Congress St., a 72,000-square-foot office building completed last year at the gateway to the one-time warehouse district. One of Boston’s top commercial real estate firms, Hunneman is currently headquartered at 70-80 Lincoln St., several blocks away from the company’s future home.
“I would say most likely it is going to be 303 Congress St.,” Hunneman Chief Operating Officer F. Michael Digiano confirmed last week, explaining the company is currently hammering out the final details with the landlord, Congress Ventures LLC. Not only is Hunneman leasing agent for the building, its CEO Stuart Pratt has an ownership stake in Congress Ventures.
While the close ties to 303 Congress St. might have helped in Hunneman’s decision, Digiano said the company did tour other options before focusing on the Fort Point Channel building. If the deal is consummated, Hunneman would take the sixth floor, which totals just under 13,000 square feet. The company has been subleasing space from Coldwell Banker Hunneman, the firm’s one-time residential division that was acquired by NRT. Coldwell Banker Hunneman will be relocating to Lexington into property occupied by DeWolfe Real Estate. Coldwell Banker Hunneman’s parent company, NRT, acquired DeWolfe in a high-stakes merger earlier this year.
If nothing else, the relocation of Hunneman should help stabilize a property that hit the market at precisely the wrong time. After launching construction in the midst of the boom market, a period when Fort Point Channel appeared to be coming into its own, Hunneman initially had hoped to have the property fully leased by its opening. While it did land the Casner & Edwards law firm, the impact of the Sept. 11 terrorist attacks last year and the overall depressed economy conspired to keep 303 Congress St. from living up to its initial leasing expectations.
If 303 Congress St. has struggled, observers maintain it is more a product of the dour economic environment than an indictment of the property itself. “It has taken a while to fill up, but it’s really a great building,” said Vivien Li, executive director of The Boston Harbor Association. “I’m sure the property will do well over time.”
Jeffrey Becker, the leasing agent for 303 Congress St., said the Hunneman lease would leave two floors available to tenants, adding he is encouraged by a recent surge in showings. “We’re seeing people looking for everywhere between 4,000 and 25,000 square feet,” Becker said.
‘Welcome News’
Li, whose waterfront advocacy group has been in Fort Point Channel for more than a decade, said the entire district has suffered a hangover after being one of the city’s most popular destinations for office users during 1999 and 2000. As much as any part of the Hub, Fort Point Channel attracted a slew of high-technology companies, even leading some to suggest it would eventually emerge as Boston’s hip new “cyberdistrict.”
“We really did feel the impact from the collapse of the dot-coms,” said Li. “It’s [Fort Point Channel] much quieter right now than it used to be.” That has lead to a palpable drop in foot traffic in the area, said Li, with retail establishments being hit especially hard.
On the plus side, there are some indications that the worst may be over for Fort Point Channel and the abutting Seaport District. Spaulding & Slye Colliers reports improving activity of late for the South Boston Waterfront office submarket, which includes Fort Point and the Seaport District. According to Spaulding & Slye, South Boston Waterfront had 77,000 square feet of positive absorption in the third quarter, compared to negative absorption of 100,000 square feet during the third quarter of 2001.
Partly due to the arrival of the Foley Hoag law firm to the World Trade Center complex in the Seaport District, year-to-date absorption for the South Boston waterfront is now at 364,000 square feet, with only East Cambridge outperforming that district throughout the Greater Boston office market. Even with that boost, however, the vacancy rate for the submarket has risen from 11.6 percent to 14.2 percent during the past year, while the availability rate has increased from 16.8 percent to 17.7 percent.
Li said she had not heard about Hunneman’s pending relocation to 303 Congress St., but said it would be “welcome news” for Fort Point Channel. “It would be wonderful to have them over here,” said Li. “Hopefully, that will bring more people into the area.”
If nothing else, Hunneman’s establishment of its headquarters at 303 Congress St. would represent confidence in a property whose identical twin met a much more unpredictable fate in 1995 when it began collapsing into Fort Point Channel. Concrete pilings used to support that structure began eroding, forcing the evacuation of the building and leading its ownership, Nationwide Insurance, to declare the building inhabitable. The original 303 Congress St. was subsequently demolished.
In order to avoid a lengthy permitting process, Congress Ventures LLC opted to rebuild 303 Congress St. with the exact footprint of the previous structure. It even retained the original architects, Finegold + Alexander of Boston, to design the new property.
