Monthly Archives: March 2016

0 Starbucks Unveils “High-End” Spin-Off Cafe

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Starbucks high-end cafe concept, Reserve in NYC

Credit: Bisnow

Starbuck on a high end scale?  Well, some customers might appreciate the vibe and who would have thought that a bottle of water would be more expensive than a gallon of gas in 2016?

According to Bisnow, Starbucks is trying its hand at upscale cafes, called Reserve, “where a 12-ounce cup of plain black coffee will go for $4—twice as much as the chain’s signature Pike Place roast…the store’s interior—with color palette evidently inspired by coffee—is an art aficionado’s dream. The walls are decked out with artwork for purchase; the center of the store is a cozy lounge complete with armchairs, sofas, standing lamps and a vintage rug; hand grinders and other coffee accessories are on display around the store.  The menus—hand-lettered pieces of paper clipped to backer boards—include exclusive and rare coffees, with prices up to $4.50 for a medium serving.”

The Reserve brand originates from Starbucks’ specialty coffee line, and is expected to grow to 500 stores globally over the next several years.

 

0 Seaport Office Boom Leads to Traffic Complications

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Boston seaport office building on Congress St

303 Congress Street (click to view property details)

The Seaport is a vibrant live, work and play location that continue to evolve.  The next challenge for all the success is how to mitigate the traffic.

From Banker & Tradesman:

Seaport Boulevard is a hotbed of construction, boasting corporate headquarters with worldwide name recognition…[and] with only two bridged access points, the neighborhood’s traffic is not yet overwhelmingly terrible (at least not any more than the rest of the city), but it grows worse with every new high-rise. Parking is becoming increasingly scarce, particularly in the winter months.

City planners are well aware of these issues and are taking steps to address them. Despite growing pains, the neighborhood known varyingly as Fort Point, the Seaport and yes, even the Innovation District, is an unparalleled success.

0 BRA Wants the Lights Dimmed on Boston’s Seaport

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Fan Pier in Boston across the water

Credit: B&T

How bright is too bright for Boston’s Seaport?  It appears that what has been proposed in the design phase is significantly dimmer than post construction and the regulators are rethinking approvals going forward.

From Banker&Tradesman:

The Vertex Pharmaceuticals headquarters’ “eye-catching arrays have met with mixed reviews in a city that often views changes in the skyline with suspicion.”

“Personally, I loathe the lighting on those buildings,” said Michael Davis, co-chair of the Boston Civic Design Commission. “We like interesting, progressive architecture, but subtlety is important and the new lighting we’re getting on the Fan Pier, no one would call subtle or sophisticated.”

Now, Boston Redevelopment Authority (BRA) officials are asking the developer to tone down the light show.

0 Boston Office Space Closes Out 2015 with Peak Rents

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office rent prices in Boston over the past few years

Credit: B&T

According to our research office rents will continue to grow through 2017 within the greater Boston market.  On top of that, construction costs continue to climb while tenant improvement dollar’s decline and rent abatement all but disappears.

From Banker & Tradesman:

Rents in Class A downtown office towers jumped 7.4 percent in 2015, with a nearly 4 percent jump in the last three months of the year, according to Lisa Strope, New England research director for JLL.

Leasing activity downtown leaped 18 percent during the fourth quarter.
The average rent for top-shelf office space in Boston ended 2015 at just under $61 a square foot, up from $52 at the end of 2013.

“Suddenly downtown is looking good to a lot of people,” Strope said.

0 Boston City Hall Plaza Transformation Edges Closer

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Boston’s City Hall Plaza is poised to change to become a destination location for locals and tourists.

rendering of Boston city hall plaze redevelopment

Credit: Boston Globe

From the Boston Globe:

The owners of TD Garden have won a bid to remake Boston’s City Hall Plaza, proposing to transform the little-loved, windswept brick expanse at the heart of the city into a bustling year-round hub of arts, food, and leisure. Delaware North Cos. was tapped for the project Thursday by the administration of Mayor Martin J. Walsh, beating out two competitors. The company said in its bid it was willing to invest “upwards of $15 million” in improvements and attractions.

While its plans are conceptual and will require public input and further approval from the city, Delaware North made numerous suggestions for the plaza, including:

  • An “iconic” observation wheel, up to 200 feet high and featuring 42 climate-controlled gondolas.
  • A “casual cool” restaurant featuring local ingredients in a temporary two-story building surrounded by outdoor eating and beer garden areas. Nearby, a ground-level “#BOSTON” sign would become “an instant landmark . . . the ultimate new Boston selfie station.”
  • An “urban beach” area would be set up in summer, replete with sand, beach chairs, umbrellas, and cabanas.
  • A winter garden and ice skating venue, featuring “cozy warming huts,” hot cocoa stations, and — why not? — curling.
  • Additional concert series that would build on the success of the popular Boston Calling festivals.
  • A series of interactive art installations, inspired by the glow-in-the-dark “Impulse” seesaws in Montreal that also play music.
  • Semi-permanent food and coffee stalls near the Government Center MBTA station.

 

0 Boston Waterfront Redevelopment a Possible Byproduct of GE Deal

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Seaport Bridge in Boston

Credit: Boston Globe

The influx of GE jobs may bring Seaport improvements along with them.  Traffic in and out the Seaport offers frustrations beyond which Waze can redirect.  Let’s hope we see much need infrastructure upgrades.

According to the Boston Globe, “Tucked in the agreement to bring General Electric Co.’s global headquarters to Boston is a commitment from the city to spend as much as $100 million to reopen the Old Northern Avenue Bridge, while the state will kick in $25 million to improve roads, pedestrian walkways, and bike lanes throughout the Seaport District…The money, city and state officials said Tuesday, is beyond what they publicly pledged to encourage the industrial conglomerate to relocate about 800 employees from its home office in Fairfield, Conn. The GE deal, announced last week, included up to $120 million in state subsidies for property and infrastructure expenses and as much as $25 million in tax breaks from the city.”

You can read more on the financial overtones of GE’s move to the Seaport on the Boston Globe’s website, here.

0 Boston Plans Services and Office Space for Entrepreneurs

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Shared office space

Credit: Boston Business Journal

Tech industry insiders are trying to find better ways to connect with you.  What do you care about when you consider starting something new:

  • Location
  • Cost
  • Term
  • Amenities
  • Collaboration
  • Mentors
  • Synergistic services

From the BBJ:

At a Monday meeting in Boston of the governing board of MassTech Collaborative’s Innovation Institute, industry leaders talked about what’s working with the state’s vast programs and services for entrepreneurs, what could be done better, and how significant the services are to the broader economy.

Massachusetts is already home to several “collaborative workspaces” for entrepreneurs, ranging from co-working spaces such as WeWork to makerspaces such as Arisan’s Asylum in Somerville, to incubators such as Greentown Labs in Somerville and accelerators such as Boston-based MassChallenge.

The MassTech Collaborative’s 2015 “Innovation Index” found that there are about 33 co-working spaces, 25 makerspaces, 26 incubator programs and 15 accelerator programs in Massachusetts.

0 BRA Feature: Boston Office Market Update

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Google map of boston office space available

Available office space in Cambridge and Boston

As Boston marches through a gilded real estate cycle as insatiable growth spills out of Cambridge into submarkets not traditionally known as tech or life science destinations, we take a moment to pause and survey the evolving office landscape.  Given the strength of the regional economic growth, the compilation of markets including Boston, its inner core and Cambridge have seen the Class A office sector achieve a vacancy rate of 8.0% in the 4Q15 which is an improvement over the prior cycle’s low of 8.3% set in Q108.  The current success of the market is underpinned by positive absorption being posted in 18 of the last 19 quarters.  Not surprisingly, the same asset class has effectively reached the high water rent benchmark of $56.42 PSF set at the peak of the last cycle when the Q415 closed with Class A office rents averaging $56.39 PSF.

While the capital markets sector has been on fire given the health and view of Boston as one of the safest markets for investment, the fundamentals have pushed the development community to enter the discussion in a rather pronounced way.  In 2012, all of the 2.1M SF of product under construction was preleased.  In the 12 month period closing at the end of 2015, only 64% of the 3.2M SF of product under construction had commitments.  This telling stat indicates that developers and their capital partners are underwriting significantly more risk as spec office buildings begin to enter the market but with the belief that tight supply will drive rents through the asset’s absorption period.

Taking a deeper look at recent pure spec office deliveries, which include Samuels & Associates’ Van Ness project at 1325 Boylston Street (237,935 SF), FRIT’s delivery of 450 Artisan Way at Assembly Row (99,000 SF) and the first of Skanska’s office deliveries at 101 Seaport Avenue (440,000 SF), lease up velocity has been impressive.  Within nine months of delivery, Samuels is almost 72% leased with the recent news of UnitedHealth Group’s lease of 125,000 SF.  Skanska is 81% leased with PwC taking 232,938 SF as the anchor tenant and FRIT is100% leased since delivering in 2014.  With CoStar showing another 15 projects under construction totaling 2.32M SF with leasing commitments of 56.9%, it is clear that the spec development cycle is ratcheting up in Boston and its surrounding core submarkets.

Additionally there are several large sites that are toeing the line and potentially adding further office inventory to the market including DIVCO’s Northpoint site which has 2M SF in the pipeline, FRIT who sits on 1.6M SF of inventory at Assembly Row, HYM Group with 1M SF at the redevelopment of The Government Center Garage, Boston Properties Hub on Causeway with 700K SF and New Balance which has another 430K SF in Allston to name a few high profile projects.  The question on the mind of the real estate community is how long this upcycle will last and which of these projects will be able to survive an inevitable down turn.

0 Stiff Competition for Tech Talent in Boston

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tech employees in Boston

Credit: Boston Globe

The growth of our tech economy has created some hurdles for employers seeking some tech talent.  Benefits to employees have moved to Foosball, basketball courts and roof decks to help promote an inviting culture.

What does your company offer?

From the Boston Globe:

An index published by the Massachusetts High Technology Council, a trade group in Waltham, ranks Massachusetts as the most difficult state in the country to hire tech workers, along with Maryland and Virginia. The index, compiled with Worcester Polytechnic Institute, the employment site Monster.com, and the New York research firm Wanted Analytics, is based on a variety of data, including job postings and local unemployment rates.

“The level of demand and hiring difficulty are an indicator of the tech sector’s strength,” said Mark Gallagher, the high tech council’s vice president for public policy and communications, “but if unaddressed could be a constraint on the region’s ability to expand and remain a leader.”

 

0 Park Square Shared Office Space: WeWork’s New Location

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WeWork opening in Park Square

Credit: Boston Globe

WeWork continues its global expansion with adding 31 St. James Avenue in Boston’s Back Bay to its location roster.

The Park Square Building, 31 St. James Avenue, is a 445,464 square foot building 11 stories tall with 40,524 square foot floors according to CoStar. The building was built in 1922 and is owned by Capital Properties.

Where is Park Square in Boston? Here’s Wikipedia’s overview:

Park Square in downtown Boston, Massachusetts is bounded by Stuart, Charles Street South, Boylston, and Arlington Streets. It is the home of the Boston Four Seasons Hotel, the Boston Park Plaza Hotel & Towers, and nearly a dozen restaurants. To the north across Boylston Street is the Boston Public Garden. To the east is the Washington Street Theatre District. The Bay Village neighborhood is to the south, and Back Bay is to the west.

At one time, the terminus of the Boston and Providence Railroad was located in the square, however after South Station opened, the terminal was closed.

A small street in the district was renamed “Park Plaice” in honor of Legal Sea Foods, a restaurant located there.