It was a short speech by any measure, a few mere words to the crowd on hand last week for the opening of the World Trade Center East office building in Boston’s Seaport District. In some respects, however, Fidelity Investments Chairman Edward C. Johnson III’s remarks seemed even more brief in contrast to the decade-long struggle it took to complete his firm’s 16-story, 503,000-square-foot tower.
Johnson, who never saw his 1980s dream to build a tower in downtown Boston come to fruition, did appear genuinely pleased in making his toast from a stairway overlooking the building’s gleaming new lobby. Along with thanking the building’s new tenants, Johnson praised the Massachusetts Port Authority, which owns the land underneath the tower, as well as the construction crew and members of Fidelity’s real estate arm, Pembroke Real Estate. He also alluded to the changing environment of the waterfront district, a wasteland of parking lots and aging industrial buildings when Fidelity and the John Drew Co. first arrived at the property in the mid-1980s.
“When people see how wonderful this part of town can be, I’m sure we will have a lot of followers,” Johnson told the assemblage of more than 200 people before allowing them to return to the night’s festivities.
Johnson was unavailable following the speech to discuss the expansion of the World Trade Center, a $400 million initiative first approved by the Boston Redevelopment Authority in December 1990. But partner John Drew, while joking that “it was just a blink of an eye,” did acknowledge to Banker & Tradesman later that making the area into a viable office destination has indeed been a challenge.
“It is an effort that has taken years,” said Drew. “But we have been very successful, and I am proud of what we’ve accomplished.”
Certainly Fidelity’s presence in the complex has been a key component, with the firm now occupying 500,000 square feet in the original World Trade Center facility. Not only did the mutual fund giant serve as a backup to take space in the new building had other companies balked, Drew said Fidelity has helped legitimize the location.
Johnson “basically saw it, supported it and never wavered,” Drew said of the property. “He’s committed to the city, but also to this development.”
Whatever the reason, the new office building has attracted a stable of solid tenants, including AEW Capital Management, Cabot Corp. and the Cetrulo & Capone law firm. Fidelity will not take any space in either that tower or a companion building known as World Trade Center West. According to Drew, the 17-story, 580,000-square-foot tower is already 50 percent committed, with expansion options likely to push that to 65 percent. Foley Hoag & Eliot will take at least 172,000 square feet, and may ultimately lease upwards of 230,000 square feet, while a letter of intent has been signed by the Nutter McClennen & Fish law firm for another 100,000 square
feet.
Pembroke Managing Director Peter F. Madsen, who joined the company three years ago, said he believes Johnson is pleased with the outcome at the trade center. While maintaining that “it hasn’t been pleasant always,” Fidelity’s willingness to deal with the evolution of the Seaport District appears justified, Madsen said, noting the continued growth of retail and restaurants in the surrounding area.
“If you are there during the day, there’s a huge amount of activity,” Madsen said. “There are a lot of people who call it home now.”
Docklands Development
Still, even with a third office tower at the site now on the drawing boards, Pembroke is not concentrating all of its activity in the Hub. Formed to invest Fidelity’s equity in real estate projects worldwide, Madsen is in London this week to celebrate the opening of 25 Cannon St., a six-story, 135,000-square-foot office building located just down the street from St. Paul’s Cathedral. The firm is also in permitting for a 1.1 million-square-foot mixed-use complex just south of London’s Canary Wharf.
To be built in an emerging market known as the Docklands, the latter effort is similar in size and mission to the World Trade Center development. Pembroke is also in Tokyo, where it recently unveiled plans for one residential project and has several other sites in mind as well. California is another target, with work recently begun on a 170,000-square-foot office building in Walnut Creek that will lead to expansion of that complex to more than 500,000 square feet.
“We have quite a few things under our belt at the moment,” said Madsen. “We’ve grown a fair amount in terms of people, and we are now trying to spread our wings a bit.”
Anchored by two dozen people in its Boston headquarters, Pembroke also has consultants or staff in each of its core cities, with a strategy of clustering its activity in a limited number of select markets.
Just how well the newer ventures will fare is anyone’s guess, but it does appear that the World Trade Center expansion is going to prove a winner for Pembroke and Drew. Rents are being achieved in the $50 per-square-foot range, said Drew, who cites the proximity to Logan International Airport and the recently constructed Seaport Hotel as among the lures which won over the East building’s new occupants, most of whom are migrating from the Financial District. Another feature which drew rave reviews at last week’s opening was the Eastport Park, a 1.3-acre plot outside the new tower’s east entrance. Featuring nautical sculptures and a diverse array of flora and fauna, Drew calls it the city’s first “art park” and said it is a further example of Fidelity and the Drew Co.’s commitment to the project.
“I think what we’ve established here in terms of plain quality is fantastic,” Drew said. “I honestly think we’ve done a very good job, and the testimony is the tenants who are coming down here.”
