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Developers are targeting a spring 2022 groundbreaking for the proposed Sky Everett apartment high-rise at 114 Spring St., part of a 3,000-unit apartment pipeline that’s proposed or under construction in the city of Everett. Image courtesy of The Architectural Team
Ample choice of redevelopment parcels, upcoming transit extension and a pro-growth administration created a formula for an apartment boom in Everett that shows no sign of abating.
More than 3,000 units are proposed or under construction in the densely settled city of 46,000, including a proposed 21-story high-rise called Sky Everett. Many of the projects are being built on former scrapyards and other industrial properties under local ownership for decades.
“You go to the owner and you tell them what their site is worth, and they basically hand you the keys,” said Adam Dunn, a senior director for JLL capital markets. “Developers are aggressively approaching these owners.”
A procession of national multifamily developers including Greystar, Fairfield Residential and Lennar Partners have acquired sites in Everett, which has seen its profile rise with the opening of the Wynn Development’s $2.6 billion Encore Boston Harbor casino tower in 2019.
And more are expected to follow, with offers due last week for the Stop & Shop Supermarket property at 1690 Revere Beach Parkway. The Grossman Cos. is offering the 7-acre property for sale after obtaining approval for a three-building, 800-unit apartment project spanning nearly 1.2 million square feet.
The property is expected to sell for prices comparable to that paid by Greystar to acquire the Wood Waste recycling property on Boston Street in Everett, said Christopher Sower, an executive managing director for Cushman & Wakefield. That property traded for $50.6 million this month as Greystar broke ground on a 650-unit apartment project. The price equates to nearly $78,000 per unit, which would translate into an over-$60 million price tag for the Stop & Shop property.
Greystar also is seeking to redevelop another industrial parcel at 35 Garvey St., which received approval for 591 apartments under previous developer Capital Hall Partners. The project has been revised by Greystar and currently in site plan review for 450 apartments.
A Triangle of Growth
Much of the multifamily housing activity has been concentrated in Everett’s commercial triangle zoning district south of Revere Beach Parkway, where former retail and industrial properties have been repurposed as large-scale housing developments.
“The whole triangle district has been upzoned with a streamlined permitting process,” said Sower, who is marketing the Stop & Shop property along with Colliers International. “It’s become an established, institutionally acceptable market.”
Fairfield, Connecticut-based Post Road Residential developed the Batch Yard and Pioneer apartment complexes, the latter of which sold in May for $132 million to Northwestern Mutual, showing the continuing demand for outer ring multifamily properties even after the disruption brought about by COVID.
“So much change is happening in this corridor that all of these projects are going to benefit from each other. Having the scrapyards and industrial uses replaced with residential is going to create a neighborhood,” Sower said.
The federal Opportunity Zone in the neighborhood offers additional tax advantages to investors, he noted.
National developers are bidding on the chance to acquire the Stop & Shop Supermarket property owned by The Grossman Cos. at 1690 Revere Beach Parkway on the Everett-Chelsea line, which is approved for a nearly 1.2 million-square-foot redevelopment including 800 apartments. Image courtesy of Colliers International
Labs Slow Boston Housing Pipeline
JLL’s Dunn cites another reason that multifamily investors are migrating to Everett and neighboring communities such as Chelsea and Revere: They can’t compete with life science developers for sites in Boston and, more recently, Somerville.
Lab developers can bid up to three times higher than apartment specialists for sites, given the triple-digit rents that some life science tenants are paying for R&D space, Dunn noted. Case in point: Boston’s Seaport District, where more than 1,000 housing units were being completed in recent years, but have been pushed aside by the life science industry migration.
Meanwhile, demand for housing continues unabated throughout the region. Multifamily completions in Greater Boston are expected to decline from 12,000 units in 2020 to approximately 9,000 units this year and just 4,000 in 2022, according to JLL research.
That’s forcing multifamily developers to divert to inner-ring suburbs such as Everett, which are becoming more desirable with planned transit upgrades and the growth of new job clusters in Somerville’s Assembly and Union Squares.
Everett, along with Boston, Cambridge and Watertown, generated over half of the multifamily housing units built in all of Massachusetts 351 cities and towns between 2013 and 2017, according to a 2019 report that detailed a “paper wall” of exclusionary zoning in many suburbs.
Transit-Focused Potential
The MBTA is considering three potential routes for an extension of its Silver Line to Everett, including two that would run close to the proposed location of the Sky Everett tower at 114 Spring St.
“Everett has a decent chunk of sizable, tired lots that are still available,” local developer John Tocco said. “A lot of towns don’t have those types of opportunities and bringing additional transportation to the area, there’s been a lot of new attention on the city of Everett.”
Steve Adams
Tocco, who led the permitting of the Encore casino for Wynn Development, is partnering with Boston-based Volnay Capital on the Sky Everett tower, which is awaiting final site plan approval as soon as July. The developers are working with Colliers on raising debt and equity for the estimated $210 million project, and targeting groundbreaking as soon as spring 2022, Tocco said.
“The mayor and his team have been very open and transparent about what they’re hoping to see in the city in terms of growth. They guide you through the process,” Tocco said.
A potential change of administration this year could change that equation. DeMaria faces a challenge from City Councilor Gerly Adrien.
“We need more housing options that residents can actually afford,” Adrien said in a statement provided to Banker & Tradesman. “As we continue development in the city, we must prioritize the financial and living needs of our residents. It is our job as elected officials to listen to the people and ensure the developers we approve are going to give back to the community and help us meet our growing housing demands.”
Unlike many of the recent developments, the Sky Everett transaction was not an off-market transaction. The Tocco-Volnay partnership – known as V10 Development – plans a rooftop restaurant run by Varano Group. They recently hired The Architectural Team of Chelsea to update designs for the 366-unit tower.
The project is targeting renters who are looking for high-rise living and Boston skyline views at discounts to new projects in Boston such as the Alcott in West End, Tocco said.
“It’ll be the highest rents in Everett, but a discount to those buildings,” he said.
