Commercial brokers and property managers north of Boston are seeing a trend of more companies doing more business online – and leasing smaller spaces as a result.
Service companies are consolidating their space as the Internet eliminates the need for amenities like lobbies and storage space, and Haverhill is one community reaping the benefits.
The trend is no surprise to NorthWay Real Estate, one of the city’s prominent brokerage firms and major landlords, which has helped facilitate approximately $10 million in sales and leased more than 110,000 square feet in downtown Haverhill in the past two years. Eying the needs of its tenants, the firm has subdivided many of its holdings for companies needing minimal office space.
“A lot of our tenants are barely a step above virtual offices,” Merit McIntyre, director of NorthWay’s investment arm, Clarity Investment Group, told Banker & Tradesman. “We might get a two-man shop that works from home, but they need a space to meet clients. And we’ve been able to provide that incubator space.”
Micro-Offices
An example of that trend is evident in the 200 Merrimack St. building NorthWay calls home. The company has its offices on the 4,400-square-foot eighth floor. Prior to NorthWay, a single company occupied the space with 22 employees.
But when NorthWay moved in, after acquiring a 32 percent interest in the office building, they chopped the single floor into offices for eight businesses, some with a footprint of only 525 square feet.
“We have a lot of offices that still have the necessity to meet with people, but they don’t need the kind of space they used to need 10 or 15 years ago,” said Gene O’Neill, a NorthWay senior vice president and former director of economic development for Haverhill and other Merrimack Valley municipalities.
Maurice LaRiviere, an attorney occupying a 15- by 35-foot space in the 200 Merrimack St. building, closed a second office in Methuen after online law research materials became readily available, and further downsized into his current space from a previous Haverhill office twice the size.
“I was here in the days when law books lined the walls, and sometimes occupied nearly an entire office,” LaRiviere mused. “Those days are over. Any research I need to do, I do it online.”
Across the city, in the Burgess-Lang Professional Center on Essex Street, Kifor Development is transforming former shoe factory buildings into offices for a variety of businesses. As their service industry tenants and other interested parties seek smaller operations, the developer has also begun subdividing its spaces. One 13,000-square-foot floor is occupied entirely by small users, said Lisa Fitzpatrick, property manager for Kifor.
Residential Driving Commercial
According to Fitzpatrick, a lot of the inquiries for micro-offices are coming from residents living in new, nearby apartment complexes. Many telecommute, but still need a place to meet clients. Others work in Boston, but want to keep an office closer to their homes, especially since some small spaces are available for only $200 to $300 per month.
More than 700 new residential units are in the pipeline for downtown Haverhill, developed by regional powerhouses including Beacon Communities, which redeveloped Rowes Wharf and South Station; and Forest City, the force behind MIT’s University Park.
“A lot of communities have seen their projects go on the shelf, while we’ve seen ours go to construction,” said William Pillsbury, Haverhill’s director of economic development and planning. “It’s putting people with disposable incomes in the downtown, which drives the restaurants and local businesses.”
A substantial rezoning of the former industrial zone near the train station, where the new residences are located, has also contributed to the commercial and residential renaissance in this small, former industrial city on the New Hampshire border. Former mill buildings sat vacant for decades after the bust of the shoe manufacturing business that made Haverhill famous.
But yesterday’s bust is today’s success, thanks to a federal Smart Growth Zoning Overlay District designation.
“A lot of the gateway cities in Massachusetts have fallen on hard times, but they have the bones to be successful because the infrastructure is already there,” said Doug Arsham, director of development for Forest City Residential Boston, whose 305-unit Hamel Mill Lofts near Haverhill’s commuter rail station are 90 percent occupied. “But they don’t all have the highway access and nightlife of Haverhill.”
