Joseph Fallon
Title: CEO, The Fallon Cos.
Age: 62
Experience: 35 years
Joseph Fallon got his start in real estate working for the late Braintree developer Thomas Flatley, who rarely granted interviews to the news media. So it’s not surprising that Fallon, too, tends to keep reporters at arm’s length. But the developer of Boston’s 3-million-square-foot Fan Pier project did agree to a sit-down with Banker & Tradesman last week at his new 14th-floor offices at One Marina Park Drive. Fallon talked at length about how his vision for Boston’s Seaport District emerged in the 1990s and came to fruition with hotels, luxury apartments, condominiums and the $1-billion Vertex Pharmaceuticals headquarters. But Fallon’s openness has its limits: he won’t say how many deposits he’s collected on the Fan Pier’s Twenty Two Liberty condo complex that opens late this year, or discuss average sales prices.
Q: What gave you the confidence to begin investing in the Seaport before the neighborhood established itself?
A: In the 1990s we started here and the reason we really focused on the waterfront then was the Big Dig. The center of gravity shifted from South Station to this area. From our window you can see the Mass Pike as well as the I-93 entrance ramp, and that was significant. The Big Dig, as much as it was criticized, really changed Boston. It eliminated the elevated highway and it connected the waterfront from a transportation mode. It added the Silver Line, which is the only public transportation that goes right to the airport terminals. Anything to do with development, you always want to make sure there’s access. This was providing all modes of access, including water transportation, which has become stronger in recent years with the water shuttles that are in place.
Q: Did you think you were taking a big risk as the neighborhood’s first housing developer a decade ago (at the Park Lane Seaport apartments)?
A: The reason I focused on that [was because] the Big Dig was doing the interchange at that location and I saw the convention center was moving ahead. The other big thing for me was Nick Pritzker, who worked 20 years to get permits, was going to develop the site. That kind of dramatic shift by any real estate developer creates more potential opportunities, as well as a real change in the demographics and lifestyle in this area.
Q: Nobody else was building office buildings on speculation during the recession in Boston. Why did you go forward with this building (One Marina Park Drive in 2009) and why did you think it would work?
A: I didn’t. But I needed to do something. We were talking to institutions on the life science side. We changed the zoning to allow life science. We were finishing up the Westin Hotel, which was as much a defensive measure by me to make sure the convention center would succeed. Getting that hotel built afforded the certainty that the convention center would move ahead and be successful. The spec office building, I couldn’t leave it as a parking lot. We were looking at getting events down here. We had a hot air balloon and were giving potential tenants a chance to see what the views would be like in an office building. The truth, is if we hadn’t started something, it could still be a parking lot today. [Law firm] Fish & Richardson was the first tenant, and then [The Fallon Co.] moved in. We brought [tech incubator] MassChallenge in [with free rent] for two reasons. CEO John Harthorne was a very impressive guy. You knew he was on a mission. We were investing in the success of John Harthorne and MassChallenge.
Q: Did MassChallenge help recruit other tenants?
A: John Harthorne recruited Joshua Boger to be on the (MassChallenge contest) selection committee. Joshua Borger is the founder of Vertex. One of his first visits to the site was at a board meeting for MassChallenge. The first time they considered the site, their real estate executive came to the site after a biotech conference and took a ride on the hot air balloon. And we went up in the balloon and he was able to see the vistas over the water and realized the interchange was here and brought it back to the executives, Joshua Borger and (CFO) Ian Smith. Mayor Menino was instrumental in that as well. They went back to the mayor to talk about the potential and the administration was very supportive of the move.
Q: What was your first job in real estate?
A: My father was a general contractor, so through high school I worked construction. They did a lot of commercial real estate and work for the archdiocese, back when they were strong and expanding.
But Mr. Flatley was a neighbor and he used to take me on jobs since I was a little kid. That’s how I got indoctrinated in the business, was through Mr. Flatley on the development side. He started me as a laborer and I worked my way up to be his vice president of development. Until he got sick, we used to meet every two or three months. He used to take the news stories they were printing about me over the years, and he used to send them to me with a little note: “Think about this,” or “Great job,” things like that. He was very close.
Q: How many pre-sales do you have at Twenty Two Liberty?
A: A lot. We don’t want to talk about it, but we’re doing very well. We’ve had a lot of people coming to the site and putting deposits down. We’re finding a lot of local buyers. For many of the buyers this will be a second home for them. They love the convenience. We have unobstructed views of the harbor and there’s not a lot of waterfront property in Boston. The real issue is there’s not been a lot of new product, a lot of rentals but none for sale. The demographics show there are a lot of people from the suburban market. We aren’t seeing a lot of the younger crowd on the rentals yet, but we’re in a luxury market. The luxury market has seen the Boomer generation come from the suburban market to the urban centers.
Q: What is Menino’s legacy for real estate and development in Boston?
A: One of the things that was most important to him was the kids in the city and the schools. From the day he was elected, kids were the most important thing and making sure the next generation was afforded the opportunities he thought were appropriate for people in the city. He never really focused on real estate. It was really making it a better city for the younger generations. And I think he would say that today if he was here.
Q: What are the most common mistakes developers make?
A: You’ve just got to pay attention to the cycles and the different uses. You can get ahead of yourself, so you have to make sure you plan properly. Everyone down here is enjoying great success because of the life that’s been brought to the neighborhood by the different uses. You’re going to see that for a few years. Once (WS Development President) Jeremy (Sclar) gets his (One Seaport Square) project built and the (Benjamin and VIA) apartments are built, you’re going to see the place become a better neighborhood because of all the uses.
Q: What neighborhoods in Boston are poised for the next development boom?
A: The (Boston Redevelopment Authority) and the mayor are focusing a lot now on areas that haven’t had opportunities. They’re working on Roxbury to do the same thing with a collaboration center that allows companies to come and work together. That would help that neighborhood quite a bit. Having those type of facilities, that allow small companies to get together and collaborate, only causes other companies to look at it and grow. Restaurants show up, small office buildings get filled. It’s all positive.
Q: Are you looking at suburban development sites?
A: We are looking at some areas in the suburbs for sure. Haven’t done anything concrete yet but there’s some opportunities there. We were looking at Somerville. Mayor Curtatone is very aggressive. He’s looking for more development to occur, so there may be opportunities out there. There’s great neighborhoods in Somerville that have demonstrated potential. Cambridge is getting to be too tight – growth is going to occur, and it has to occur somewhere.
