Nearly 8 million square feet of development are on the way in the North Station, West End and Government Center sections of Boston in the next few years.
Boston’s Bulfinch Triangle was a neighborhood frozen in time: a collection of century-old mid-rises containing dusty storefronts, second-tier office space and half-empty sports bars.
Urban renewal schemes wiped the slate clean in the nearby Government Center and West End neighborhoods but left the Bulfinch Triangle untouched. Then the Big Dig opened it up to new development possibilities.
“This was a dark, dank, seedy area,” recalls Abby Goldenfarb, a vice president at Boston-based developer Trinity Financial. “It was not an area you would go in unless you were coming out of a Bruins game.”
Long gone are the elevated MBTA Green Line and Central Artery highway that bathed the neighborhood in shadows and noise. A two-lane bicycle track is being built down the middle of Causeway Street. Cutting-edge office space and luxury apartment towers are set to rise to the north and south.
Minus the harbor views, but with better public transit, Bulfinch Triangle starts to look a lot like the Seaport District of a decade ago. Think Fort Point before the glassy office towers began rising on the waterfront.
“There was always good (office) demand but right now, with the amount of residential that’s going in, it’s a really interesting and hot submarket that we really like,” said Robert Hawkins, director of asset management for KS Partners of Woburn, owner of a 60,000-square-foot office building at 225 Friend St. that is 100 percent occupied.
Multibillion-dollar mixed-use projects being developed by Boston Properties and HYM Investments at North Station and Government Center will bring millions of square feet of class A office space to the area, but for now, availabilities are scarce. Asking rents for the neighborhood’s 2.6-million-square-feet office market average in the high $30s, according to research by Boston-based brokerage Avison Young, with some properties topping the $40 mark for the first time.
“It has a funky, down-and-dirty type of feeling, which is what lots of the tech companies like,” said Karyn McFarland, a principal for Avison Young, whose team recently completed 35,000 square feet of office leases in the neighborhood.
Online ad manager Pixability will relocate in early December to 77 North Washington St., while software developer Projector PSA Inc. leased 8,175 square feet at 84 Merrimac St.
Pixability sprang from the Cambridge Innovation Center incubator in 2013 and scouted properties in Cambridge and the Seaport before choosing more affordable office space at 123 North Washington St. After outgrowing that space with plans to hire dozens more employees in Boston, it recently leased nearly 14,000 square feet at 77 North Washington St., a nine-story office building overlooking the Greenway.
“We’re working with YouTube and the top advertising agencies, and we’re going to be in a brick-and-beam building juxtaposing history and ultra-modern technology,” Chief Marketing Officer Rob Ciampa said. “It’s an environment people love to work in and it helps us with recruiting.”
Pixability joins a cluster of marketing, public relations and ad tech companies in the neighborhood including 451 Marketing, AMP and CTP.
“To me, it’s one of Boston’s best-kept secrets,” Ciampa said.
Newton-based Boston Development Group has owned four office and retail properties in the neighborhood for over a decade: 98 North Washington St., 205 Portland St., 239 Causeway St. and 160-164 Causeway St.
“We started (acquiring properties) when we realized the elevated T was coming down on Causeway Street,” CEO David Zussman said. “(Rents) have increased very recently. We offer a lot of brick-and-beam space, which is appealing, and the transportation is fabulous. With the retail that Boston Properties and the Jacobs family are doing at the Garden, it’s going to change the whole area into a community.”
Investment Properties In Demand But Scarce
While properties tend not to turn over frequently, the neighborhood’s transformation has attracted recent notice from out-of-state investors.
“The North Station area feels very much like the Seaport did five to seven years ago,” said Ben Sayles, a director at HFF Inc. in Boston. “You get the sense that great things are around the corner.”
Bridgeton Holdings, a New York private equity fund, acquired the 70-room Holiday Inn Express building on Causeway Street in early November for $24.5 million. CEO Atit Jariwala said Bridgeton has put in offers on half a dozen properties in Boston recently and is actively pursuing two more.
Office renovations are one option, but many of the properties have redevelopment potential. Woburn-based Somnath Hospitality offered one approach to adding value on a tiny lot, acquiring a one-story vacant bank branch on Canal Street for $3 million and gaining the Boston Redevelopment Authority’s approval in 2014 for a 90-room boutique hotel rising 15 stories. The project has yet to break ground and Somnath executives could not be reached for comment.
Zoning regulations in the neighborhood allow development up to 80 feet by right and up to 100 feet if applicants go through a large project review, according to Lauren Shurtleff, a senior planner at the BRA.
“There are a lot of one-story buildings and the neighborhood is great for transit,” Shurtleff said. “It’s the right place for some density, but density respecting the historic fabric of the Bulfinch Triangle.”
Residential Projects Will Benefit Retail
Approximately 1,800 residential units are proposed, approved or under construction in the West End, North Station, Bulfinch Triangle and Government Center neighborhoods in projects sponsored by Equity Residential, AvalonBay Communities, Boston Properties, Related Beal, Trinity Financial, HYM Investment Group and Pizzuti Development.
The next wave of residents arrives in March, when move-ins start at Trinity Financial’s 320-unit One Canal apartment complex. Agreements are in hand for 20 percent of the loft-style condos at Pizzuti Development’s Forecaster 121 on Portland Street, according to Laura Pizzuti, a partner with Pizzuti Development.
Built as a conversion of the Forecaster raincoat factory, the condo building has sold 20 percent of the units since April with average sales of $950 per square foot, Pizzuti said. Completion is projected for fall 2016.
“Our family began investing in the neighborhood over 30 years ago and it’s been amazing to watch the transformation, from the Green Line overhead coming down to all of the properties being built,” she said.
HYM Investment Group last week filed final designs with the BRA for a 45-story, 486-unit apartment tower at the Government Center Garage redevelopment site.
“There are the move-ins from the suburbs and there are the young residents with a tech focus,” said Rosalind Gorin, president of Boston-based developer H.N. Gorin, which owns a pair of properties in the district. “We’re seeing this in the Innovation District, and I suspect we’re going to see it in the Bulfinch Triangle.”
The infusion of full-time residents is likely to generate more demand for retail and fill in the dwindling ranks of vacant storefronts.
“The office space is 9-to-5, five days a week, and you really need residential to have more activity in retail,” Gorin said.
