The Bruins losing their chance to defend their title as NHL champs silenced crowds around the TD Garden and North Station last week. But despite the loss, not all news coming from the storied sports arena’s neighborhood these days is negative.
The Bulfinch Triangle is considered by some to be one of Boston’s next hotbeds of development, especially for residential projects. And for some developers and commercial brokers, that could prove even more exciting than if the B’s had advanced.
All told, the area around North Station could be home to more than 1,660 apartments and a 190-room hotel if all the projects planned for the area are built. Commercially, the 3.4 million-square-foot North Station/Government Center office submarket was only about 10.8 percent vacant through the first quarter of 2012, according to information provided by Cassidy Turley FHO.
The HYM Investment Group recently helped draw that number down by signing PUMA and SCVNGR to its tenant roster at One Congress Street in the area. Banker & Tradesman first reported in October that PUMA was moving its global marketing and product design offices from the Boston Design Center to One Congress, more commonly known as the Government Center Garage.
The athletic shoe and apparel brand, whose North American headquarters is in Westford, signed a lease for 60,000 square feet above the parking facility, bringing more than 200 employees with it. Then just last month, mobile technology firm SCVNGR announced it was inking a lease at One Congress for about 30,000 square feet, moving from its Kendall square digs.
Living, Working
Several factors are fueling the increased interest in the North Station submarket, industry sources told Banker & Tradesman – not the least of which is the prospect of all that new residential development either underway or in the works, said HYM Founding Partner Thomas O’Brien.
“The location is really well-served by the MBTA,” O’Brien said. “But more than that, it’s become a location where people envision themselves living. Before, it wasn’t a place where many folks lived. For people to live near where they work near is a very attractive thing.”
Another local development firm said it is noticing the same increased activity. The Boston Development Group (BDG) hopes to start construction on its Merano residential project this fall. The company is planning to build a 210-room Marriott Courtyard hotel, 230 apartments, 25,000 square feet of retail space and about 184 parking spaces on the Rose Kennedy Greenway, across Causeway Street from the Garden.
BDG owns about 275,000 square feet of office space in the North Station submarket. Its properties experienced roughly 24,000 square feet of positive absorption last year, a much stronger year than during the recession, said Richard Wakeman, Jr., vice president of leasing and acquisitions for the firm. Rents are in the low- to mid-$20-per-square-foot range and are starting to firm up thanks to recent activity, he offered.
“I’ve had five showings of the same spaces in the last two weeks each,” Wakeman told Banker & Tradesman. “People are looking to expand, and leasing activity here has really picked up.”
Proving Grounds
Of course, not all commercial real estate executives agree that the Bulfinch Triangle will be the next ‘it’ neighborhood. Brad Takala, managing director of acquisitions for the Davis Cos., said that while plenty of opportunities exist for smaller firms to find deals on office space, the area lacks the corporate density to make it a destination for larger users.
“I think that submarket still has to prove itself as a viable corporate location,” Takala said.
But that could be the whole point. Maybe it’s not supposed to be a destination for major corporate players, PUMA aside. North Station office buildings have a solid inventory of smaller floor plates where landlords are more willing to offer flexible lease terms. And those are the kinds of ingredients many startup software and high-tech companies are often hungry for, said William Foley, principal for Cassidy Turley FHO.
Obviously the first choice for the techies is Kendall Square in Cambridge, but rents there are top-shelf and space is scarce. Next is the Seaport, where rents are rising and available space, again, is getting low for small and mid-sized firms. A logical choice for many of those companies would be to split the difference and head for the North Station area, Foley said.
“Just look at what SCVNGR did,” Foley added. “They looked everywhere. For that company to plant their flag in the North Station submarket could be a harbinger of things to come.”
