Author Archives: Wil Catlin

0 PTC chief executive says move to the Seaport has paid off

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By Jon Chesto and Shirley Leung | Boston Globe | February 17, 2020

Jim Heppelmann runs one of the city’s biggest software companies. But you won’t find the PTC chief executive in a corner office at the Seaport District headquarters. In fact, you won’t find any corner offices at all.

PTC just celebrated its first year in Boston, and its offices are a far cry from the old digs in Needham. About 1,200 PTC employees work on floors 11-17 in the top half of an oval-shaped office building with floor-to-ceiling windows. Like his employees, Heppelmann doesn’t have a personal office. Technically, he doesn’t even have an assigned desk. PTC now uses an increasingly common approach known as “hoteling” at its headquarters to save on space and spur more collaboration. Workers pick their desk when they arrive in the morning. Perhaps not surprisingly, people tend to gravitate to the desks they use frequently.

The move to 121 Seaport Boulevard helped accelerate Heppelmann’s efforts to transform PTC’s culture. It’s become much easier to attract younger workers. Employees now have more than 50 restaurants within walking distance. In Needham, they only had one — and it was in a hotel.

“We were kind of out in the wilderness,” Heppelmann said. “Now, we’re in the middle of things.”

To afford city prices, Heppelmann dialed back the square footage to 250,000 from more than 300,000. . He also traded the old structure for an open-office environment. “It’s completely changed the vibe,” he said.

The move is part of a broader transformation that Heppelmann has been undertaking since becoming chief executive in 2010. A high-flying stock in the 1990s that subsequently cratered amid the dot-com bust, the company was once best known for its computer-aided design software. Its shares have risen significantly since Heppelmann took over, and the company now has a market value of about $10 billion. The CAD software business is now called Creo and Heppelmann has expanded the company into connected devices (ThingWorx) and augmented reality (Vuforia). He expects sales of ThingWorx to exceed Creo this year for the first time.

The most important shift, though, has been to move to a subscription model (aka software-as-a-service). PTC’s $470 million acquisition of Cambridge’s Onshape last year helped accelerate that change.

Heppelmann wants to see more innovation in the Innovation District, the name former mayor Thomas M. Menino started using for the South Boston Waterfront to attract software firms and a startup culture. Lately, it has become more of an extension of the Financial District, with law firms and other corporate types, amid soaring rents.

Heppelmann is still hoping to see more tech companies join PTC there. So, it seems, does Mayor Martin J. Walsh, who visited the company around the time of its one-year anniversary in Boston. “He said, ‘We were so happy to hear that a technology company was coming to the building,” Heppelmann said.

ROTHSTEIN NAMED AN EXECUTIVE AT CERES

Steve Rothstein is on the move again.

Last week, he joined Ceres, the Boston sustainability nonprofit, as the inaugural managing director of the Ceres Accelerator for Sustainable Capital Markets. It’s not a business accelerator in the traditional sense of incubating startups. Rather, Rothstein’s job entails what he calls pushing for “system change” to tackle the climate crisis.

“Overall, we’re not going fast enough,” Rothstein said. “We need to make dramatic changes to get to carbon neutral. We have to accelerate how we’re thinking about it.”

For Ceres, it’s a new approach to sustainability; the nonprofit has worked for the past three decades to help individual companies and investors shape policies and practices.

Rothstein, for example, is currently working with federal regulators, such as the Federal Reserve and the Federal Deposit Insurance Corp., on how the banking and insurance sectors can become more environmentally sustainable.

Why would it matter to them? Studies indicate that the climate crisis could cost the United States up to 10.5 percent of its gross domestic product by 2100. Cutting greenhouse gas emissions sharply and achieving net-zero goals will require aggressive action.

In many ways, the move to Ceres is a return to Rothstein’s roots. He stepped down in December as the executive director of the John F. Kennedy Library Foundation, and before that, he served as president of the Perkins School for the Blind. But he spent the early part of his career working on the environment and renewable energy as president of Environmental Futures and as cofounder of Citizens Energy Corp. with Joseph P. Kennedy II.

HABITAT CEO AIMS TO HASTEN THE PACE OF BUILDING

Building affordable housing in the Boston area is no easy task, especially considering the high prices for even the smallest pieces of land.

But Jim Kostaras, the new president and chief executive of Habitat for Humanity Greater Boston, wants to step up the pace. Kostaras recently took over for Lark Palermo, who ran the local Habitat for Humanity chapter for 14 years. During that time, they built homes for 49 families. (Habitat requires future residents to put in at least 300 hours of “sweat equity” in the construction of their homes.)

Here’s one way to accelerate the process: Kostaras is considering partnering with residential developers so Habitat can build the affordable component of their housing projects. That way, the developers take care of the land acquisition.

Kostaras, an urban planner and licensed architect, joined Habitat from the Institute for International Urban Development in Cambridge, where he was a senior fellow who helped local governments around the world address urban poverty and other issues. He previously held key planning roles for the cities of Somerville and Boston.

After several weeks on the job, Kostaras thinks the best part might be his 25-person staff.

“They are all highly committed,” Kostaras said. “I don’t doubt for a minute that most of them, in this job market, could be working somewhere else for more money but they’ve made a huge commitment to our mission.”

GE ENDS RETIREE PROGRAM

Even General Electric retirees are feeling the pinch at GE these days.

Among GE’s budget cuts, the Boston company has decided to end its matching gifts program for retirees as of April 16. That means GE retirees now have two deadlines on April 15: It’s the tax-filing deadline, and it’s the last day for them to secure a corporate match for their qualified donations. The matching program will continue for current employees.

A company spokesman couldn’t provide a breakdown of how much money this could save. The GE Foundation gave $59 million in grants in 2018, including $30 million in matching gifts.

In a Jan. 31 letter to retirees, foundation president Linda Boff attributes the change to “tough decisions” to improve GE’s financial position. She said the shift reflects the foundation’s more focused strategy on STEM education, work force diversity, and improving health care access as the company pares back its contributions to the foundation.

“This decision was made after careful consideration of balancing GE’s community support with our work to return the Company to a position of strength,” Boff wrote. “I understand that knowledge doesn’t make this news easier to absorb from a personal standpoint.”

LAW FIRM MOVING DIGS TO CLARENDON

Most larger law firms in Boston are clustered in the Financial and Seaport districts, within walking distance to courthouses and the State House.

Global law firm McDermott Will & Emery is breaking ranks — and heading to the skies.

The firm just opened its new Boston office near the top of 200 Clarendon (aka the John Hancock tower) after moving from 28 State St. next to City Hall. More than 100 people made the move, including 70 lawyers. The firm leased 57,500 square feet on floors 57 and 58 in the Boston Properties-owned tower, compared to 70,500 square feet on State Street.

It might be further from the courts but Tony Bongiorno, managing partner of the Boston office, stressed its proximity to McDermott clients as well as the Mass. Pike and restaurants, gyms, galleries, and shops in the Back Bay. And those million-dollar views aren’t bad, either.

0 Could Boston Office Rents Hit $100 Per Square Foot

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The Boston office market is not only more expensive, but there are far fewer options.  That, combined with construction costs, has put a real increase in the price for office occupiers in The Hub. Tenants are trying to do more with less; reconfigure their existing space to accommodate how it use it currently.  Solutions that, at one point, seemed simple require a little more thought, open plans with picnic tables are not the solution.  Employers are more and more accommodating flexibility in employees’ schedules.  Four day works weeks and working remotely have allowed companies to increase staff while maintaining their footprint by offering a hot desk solution.

Second generation options are a significant cost-saving solution. When your peers expand after they closed their round, jump on their sublease option.  The office space might not be perfect, but for 24 – 48 months, it would be the best value play.

Boston’s Booming Economy Turns Demand Toward Office Towers

By Scott Van Voorhis | Banker & Tradesman Columnist | Jan 26, 2020 |

 

 

 

 

 

 

Boston’s skyline is poised to be transformed in the next few years as millions of square feet of office space come online as developers respond to per-square-foot rents that flirt with triple digits.

A bevy of new luxury condominium and apartment towers have joined Boston’s skyline over the past two decades, with sales of multimillion-dollar units at the 60-story One Dalton and the Mandarin Oriental, among many others, powering an historic building boom.

Now, after decades as a supporting cast member amid an epic surge of development, Boston’s office market is poised to take center stage over the next couple years, with record-breaking rents and a mini–surge in new tower construction.

All told, Boston’s office market may be poised to make its biggest splash since the 1980s, when a myriad of new office towers went up in the Financial District, from the 46-story One Financial Center across the street from South Station, to Don Chiofaro’s twin–tower International Place complex and its distinctive, rose-granite panels and tripartite-style windows.

 

A Forest of New Towers

The aggregate rent for both class A and class B office buildings in downtown Boston is at a record high $65 a square foot, beating previous peaks in 2008 and during the dot–com bubble, circa 1999/2000.

“We are at the highest rent level we have ever seen in aggregate in the city of Boston,” said Aaron Jodka, managing director for research and client services for Colliers International.

In a sign of the times, Texas developer Hines is finally moving ahead with plans to build a 51-story office tower over South Station. The project has been deferred and delayed so many times since the 1980s that is has graced by annual column in these pages on “turkey projects” more than once.

 

Hines’ website still touts how the new high-rise is ready to break ground in 2018, though I guess after 40 years of delays and false starts – or as they say in Texas, “all hat and no cattle” – what’s a year or two?

With new investors, construction on the tower is set to finally kick off this year – cross our fingers – with plans for 768,000 square feet of office space and 175 condos.

A short walk away in the heart of the Financial District, Millennium Partners is plunging ahead with its own plans for 691-foot-high office and condo tower at Winthrop Square in the heart of the Financial District.

The new building is slated to open in 2022, and will boast 775,000 square feet of pricey, top-shelf office space along with 420 luxury residential units.

Down near City Hall and Government Center, HYM’s One Congress, a $1 billion, 1–million–square–foot-plus edifice, will open later that year.

Around the corner, owners of the One Post Office Square tower are near the finish line with their sweeping, $250 million renovation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

While office demand will take center stage by driving new projects in 2020, expect the condominium market to stay healthy, even if it won’t capture headlines.

Rents Hit Record Heights

Meanwhile, office rents, already at record levels, are poised to go even higher in downtown Boston in 2020, with the average rent for existing class A and B towers likely to shoot well into the $70-dollar-a–square foot range and up, according to Jodka.

The Colliers research chief expects another year of double-digit rent increases in 2020 for both top-shelf towers and their respectable but less glamorous class B neighbors.

It comes atop an expensive 2019, with rents in class A towers having shot up 13 percent, followed by a 10 percent increase in rents in class B buildings, Jodka noted.

And developers of the new office towers are going for broke, seeking rents as high as $90 a square foot and, in some cases, $100 or more in the case of One Post Office Square as it completes its gold-plated revamp.

Putting aside a deal or two in the Hancock tower, reaching triple digits with any consistency has been an elusive goal for real estate companies and investors that own Boston’s office towers.

Howewer, a surge of pricey, new office towers promises to finally push Boston’s leading corporate addresses over a benchmark it is has been flirting with for decades.

 

Demand for 5M SF

Underwriting this rent growth has been steady and strong job growth powered by the Boston area’s big economic engines: life sciences, technology, higher ed, health care and financial services.

Companies are on the hunt for 5 million square feet of space, according to Colliers, a staggering number that is equivalent to five Prudential towers.

That demand has steadily driven down office vacancy rates and driven up rents.

By contrast, while Boston’s condo market is likely to have another solid year, for once it appears likely to take a back seat to what’s happening in the office market.

If anything, Boston is glutted at this point with posh new luxury condos and apartments, all of which are beginning to look the same, whatever the boasts of the developers.

 

There’s also a question of whether there is truly enough demand – or in other words, enough people making at least half a million a year – to support this huge and growing pool of multimillion-dollar condos and apartments.

There is likely far more speculative buying than we realize, with investors, both overseas and local, snapping up condos in towers across the city as you would with a hot stock, with hopes of flipping them later.

But while the luxury condo market is likely to eventually get its comeuppance, that reckoning will likely have to wait.

The recession clouds that overshadowed everything last year as the stock market gyrated have parted, yielding to blue skies and hopes for a banner year ahead.

So, here’s to Boston’s office market. May 2020 end on as promising a note as it is starting off on.

 

Scott Van Voorhis is Banker & Tradesman’s columnist; opinions expressed are his own. He may be reached at sbvanvoorhis@hotmail.com.

 

 

0 The Hottest Cities For Commercial Real Estate Investing In 2020

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By Jeff Levin | Forbes | February 13, 2020

Opportunities are abundant for commercial real estate investing in 2020. Most economists expect the U.S. economy to continue expanding, with volatility in global financial markets making the U.S. more attractive to international investors.

Across the U.S., there’s potential for investors in commercial real estate markets. Seven cities, though, stand out as providing the most exceptional prospects for investment. Below is a list of these metro areas, ranging from large to mid-size, in alphabetical order.

Each has different reasons for making this list, but there are some commonalities. Most of the hottest commercial real estate investing cities for this year are experiencing job growth and a corresponding concern with affordability.

 Here are the cities that I see presenting the highest commercial real estate investing potential this year.

1. Atlanta, Georgia

Rent growth is one reason Atlanta makes this list. CBRE expects rents to grow more in Atlanta over the next few years than anywhere else in the country, with a projected increase of about 4% between now and 2024.

The “hipsturbia” trend is another reason Atlanta is a hot market for commercial real estate investing. Hipsturbia refers to the increase in walkable, mixed-use developments in a city’s suburbs. These projects are attractive to Millennials who can’t afford to live in expensive downtowns but who don’t want long commutes. Two Atlanta suburbs in particular, Decatur and Alpharetta, are examples of hipsturbia in action.

2. Austin, Texas

Economists expect Austin to lead the nation in job growth in 2020. Correspondingly, the city is also likely to add the most people over the next five years. Lower taxes, affordability and tech jobs are fueling Austin’s ongoing economic boom.

Apple announced in November 2019 that it’s building a $1 billion campus in North Austin. The company expects to open the first buildings in 2022 for at least 5,000 employees. As many as 15,000 people may end up working at Apple’s Austin campus, and they will need homes to live in.

3. Boston, Massachusetts

While neither job or population growth is forecasted for Boston, and the metro area is only the tenth most populous in the country, it packs an economic punch. According to Bureau of Economic Analysis data we analyzed, Boston is sixth in the nation in gross domestic product per capita.

Technology and education boost Boston’s economy, attracting investments and well-paid workers. The area lacks enough medium-density housing to meet demand, leaving an opportunity for commercial real estate investors to satisfy this need.

4. Charlotte, North Carolina

Infrastructure projects in Charlotte are indicators of this city’s growth. A five-year expansion of Charlotte Douglas International Airport is underway, and the metro area has invested in adding a bus and light rail network.

Low taxes and a business-friendly environment are pushing Charlotte’s development. Both the manufacturing and tech industries are investing in the city, as are real estate investors. The metro area attracted 1.5% of the nation’s real estate investment in 2019. That’s up from 1.2% between 2016 and 2018.

5. Dallas-Fort Worth, Texas

Speaking of infrastructure spending, the Dallas-Fort Worth metro is expanding its Cotton Belt Regional Rail Corridor. The Silver Line, expected to launch in 2022, will connect Dallas and its surrounding counties to Dallas-Fort Worth (DFW) International Airport.

Also at DFW, American Airlines is spending $3 billion to build a new terminal that is scheduled to open in 2025. Amazon’s cargo air service, Amazon Air, is opening a regional hub at the nearby Fort Worth Alliance Airport.

These projects illustrate Dallas-Fort Worth’s growth, an expansion that’s projected to continue. The metro area is not far behind Austin in the number of new jobs foreseen this year.

6. Nashville, Tennessee

Nashville is a hot commercial real estate investing market because jobs are arriving in the city. At the same time, rents are rising, with CBRE listing Nashville fifth in the country in rent growth over the next five years.

Two major announcements in 2019 foretell considerable employment growth for the area. Amazon is building an Operations Center of Excellence in downtown Nashville. The $230 million project will add at least 5,000 jobs, and Smile Direct Club plans to hire 2,000 people to its Nashville offices between now and 2024.

7. San Jose, California

Like Boston, San Jose is a high-population area supported by education and technology. Also like Boston, the city lacks enough medium-density housing to meet demand. CBRE expects rents to grow by about 1.6% in 2020.

San Jose’s metro area also features hipsturbia aspects. For example, its suburb of Santa Clara features many mixed-use, walkable developments.

One thing that makes San Jose stand out from the rest of the cities on this list is that its entire downtown is a qualified opportunity zone (QOZ) created by the 2017 Tax Cuts and Jobs Act. The intent is to encourage economic development and job growth. We don’t yet know if QOZs fuel expansion, but the potential exists for QOZs to spur commercial real estate investment in San Jose’s center.

Setting Up Success

Economists expect the U.S. economy to grow slower this year than last, but a recession isn’t likely. The U.S. remains a reliable option for international commercial real estate investors. Seven cities in particular present the highest commercial real estate investing potential: Atlanta, Austin, Boston, Charlotte, Dallas-Fort Worth, Nashville, and San Jose.

However, opportunities and risks can shift throughout the year. That’s why it’s essential for investors to track global, national and local economic and demographic trends. Doing so can help you make wise investments while avoiding costly errors.

0 Glass enclosure pitched for downtown Boston tower

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175 Federal Street is on the move and looking to ignite a relationship with retail. The walkway between 175 & 176 Federal Street is one of the most active pedestrian points in the city travelling too and from South Station.

By   – Real Estate Editor, Boston Business Journal | January 28, 2019

The owners of 175 Federal St. — the Fiduciary Trust building with a “flared out” shape at Dewey Square, just across from South Station — intend to add a two-story glass enclosure around the building to host restaurant or retail tenants.

Deka Immobilien, the real-estate arm of German real estate fund company Deka Group, has proposed relocating the building’s lobby to the corner of Purchase and Summer streets to align with the Rose Fitzgerald Kennedy Greenway. Deka bought 175 Federal St. in 2016 for $139 million.

“The objective of this project is to better integrate this iconic building with Downtown Boston and to upgrade the quality for the tenants and retail customers,” said Gabriele Gottschalk, senior project manager of construction and development at Deka Immobilien Investment GmbH, in a statement. “Boston, and the Financial District in particular, have gone through tremendous growth and change since 175 Federal’s initial construction. Deka Immobilien intend to develop the building to a flagship premium property within their U.S portfolio.”

A number of developers have reoriented buildings to face the Greenway since the park’s opening, including Oxford Properties at nearby 125 Summer St. And Boston Properties (NYSE: BXP) added a glass atrium outside 100 Federal St., with tenants including Blue Bottle Coffee.

The 175 Federal St. project would create 12,000 square feet of new space.

Boston-based CBT Architects designed the project, and Cushman & Wakefield is the construction manager.

0 As Garage Usage Dwindles, Operators Are Starting To Charge More To Park Luxury Vehicles

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Parking in major cities is expensive.  The closer to the urban core the more you can expect to pay.  Visits to a special event like a concert at the Garden or a game at Fenway could set you back $40.  I park in Back Bay on Boylston Street and pay $510 per month for unlimited access and I have not been hit with a premium parking fee despite driving a full size truck.  I suppose if my garage wanted to implement such a fee I might consider where my additional $2,400 per annum could be better spent.

By Cameron Sperance, Bisnow Boston | January 5, 2020

When Lisa Nickerson, the owner of a Boston-based marketing firm, traded in her Audi for a Tesla last year, a representative with Icon Parking Systems — which owns the garage where Nickerson had a monthly parking membership for more than five years, she said — reached out with bad news for her wallet.

The garage operator told Nickerson her monthly rate was going up by $200 each month. She initially figured it was because the garage was going to charge the electric car while it was parked, but Nickerson said she found out the hike from $325 per month to $525 — according to documents Bisnow verified — was simply because she was now driving “an exotic car.”

Higher monthly parking rates are common in New York City, where land prices and construction costs are higher than anywhere else in the country. But the practice is beginning to spread to Boston, portending future proliferation in other high-cost cities.

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“When I drove in with the Tesla, they told me there’s an upcharge because they have to be more careful with exotic cars,” Nickerson said. “Were they not being careful with my Audi? And are they not just as careful with a Ford?”

Manhattan Parking Group, the owner of more than 100 New York parking facilities, charges an additional $150 each month for luxury cars. MPG’s definition of luxury cars includes brands like Lexus, Audi, Mercedes and BMW, according to signs at the operator’s garage at 530 West 30th St. near Hudson Yards.

Icon Parking Systems doesn’t have a defined list of cars for which the garage operator requires a luxury surcharge but says the fee is only deployed on exotic cars like Maserati and Rolls-Royce as well as more tech-geared automobiles like Tesla, Icon Parking Systems Vice President of Customer Relations Betsy Wiesener said.

“Generally, the high-performance, luxury exotic cars do need extra care,” she added. “It’s the difference between a newborn and a 16-year-old. They just need more attention.”

Icon Parking will only allow certain members of its team to park cars it deems luxury models. The operator also mandates those automobiles get extra space on the main floor and remain in eyesight of the garage office to prevent scratches or potential damage, as cars like Teslas have heftier repair bills than a regular Ford sedan, Wiesener said.

Depending on who you ask, a higher monthly parking rate for luxury cars in urban garages is either about liability over increasingly tech-savvy automobiles with rising repair costs, or it is a sign of difficult times ahead for garage owners and operators in an industry where garage utilization is down as much as 25%. No matter why luxury fees are proliferating, shifting trends in mobility are driving changes in the way garage operators do business.

“In an era where things were different or if you had better margins, you could leave things on the table,” Wiesener said. “In this climate, you can’t.”

The Vanishing Parking Garage

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Costs are rising for garage operators while garage utilization is declining.

The minimum wage in New York City, now at $15 an hour, has increased three times for employers with 11 or more employees since 2016. The $15 per hour rate became standard for businesses of all sizes at the end of 2019. That has taken a toll on garage operators, because many of the employees who park cars make minimum wage.

Total utilization of transient parking is down between 10% and 25%, according to research conducted on parking and mobility by the Gensler Research Institute in 2017 and 2018.

“Almost every urban garage is way down on utilization, and most operators are raising prices to keep revenue equal,” said Gensler principal J.F. Finn, who is based in Boston.

Garage operators are also threatened by legislation aimed at curbing congestion. A congestion pricing plan — which would be used to fund mass transit improvements — included in New York Gov. Andrew Cuomo’s $175B 2019 budget calls for fees to be levied on cars entering Manhattan south of 60th Street. While the toll rate has yet to be finalized, the fee expected to be enacted at the end of this year could surpass $11 for some drivers with a personal vehicle.

Although congestion pricing isn’t approved for Massachusetts roadways, several bills have been filed and a growing campaign from transit advocates calls for boosted tolling to get people out of their cars and onto mass transit or in a shared vehicle or on a bicycle to reduce traffic.

As early as 2040, more than half the miles traveled in the U.S. could be in shared autonomous vehicles that don’t require the type of idle time in a parking garage used today by monthly users, according to a 2018 Deloitte report.
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Urban millennials’ reliance on ride-share platforms like Uber or car-share companies like Zipcar have also thrown out the conventional school of thought in designing urban garages, Finn said. Gensler almost always designs urban parking garages today to accommodate future conversion to alternative uses like flexible office and lab space or urban farming.

Only one of the four floors of above-ground parking at Kroger subsidiary 84.51°’s Cincinnati headquarters was designed to only accommodate parking. The rest, with 14-foot floor-to-floor ceiling heights, has future office use in mind.

“It used to be a no-brainer: If an office was coming into a project with 300 people, that meant 250 cars,” Finn said. “That’s not happening anymore, and that’s why luxury prices are going up.”

Finn admits he can only speculate on what is driving operators to levy the specific luxury parking surcharge in markets like New York City and Boston. But when he looks at the urban parking utilization data and real estate trends, it may not be a sustainable solution.

As urban parking utilization goes down, owners and operators have to increase rates to maintain existing revenue. But eventually, owners and operators may find converting the parking garage to alternative uses and charging rent is a more viable financial path forward.

Gensler has already designed conversions for about 300K SF of parking garages in the U.S. in the last two years and anticipates significantly more in the future, Finn said.

“It could be that jacking up prices for the luxury market is to generate a revenue stream, but my sense is it’s a temporary Band-Aid solution,” he added. “You’re not generating something that’s sustainable in the long-run — just treading water.”

0 Boston Office Report – Fall 2019

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By Corina Stef Commerical Property Executive | December 17, 2019

Demand for new space continues to outpace supply, pushing smaller companies to the suburbs.

Boston continues to show solid fundamentals, outperforming expectations amid a cooling economy. The metro’s diversified economy and strong academic footprint continue to provide an endless technology, life sciences and biotech talent pool for companies to draw from. Government officials launched the Boston 2030 initiative, which calls for an upgraded subway system and expanded Green Line subway. The favorable business climate continues to attract various international investors to the market, including Siemens Healthineers and Takeda Pharmaceutical. The recently rebranded Raytheon Technologies Corp. has also announced plans to relocate from Connecticut to Boston.

READ THE FULL YARDI MATRIX REPORT

The professional and business services sector led the way in job gains (9,300 jobs, up 1.5 percent year-over-year in August). The information sector gained 3,400 jobs due to tech titans such as Google and Apple expanding their operations in the metro. The influx of new companies and large expansions—particularly in and around the metro’s innovation clusters such as Cambridge, the Back Bay and the Seaport Innovation District—led to an office vacancy rate of 9.7 percent as of September.

Despite a ballooning pipeline comprising some 8.8 million square feet under construction as of September, demand continues to outpace the existing supply. Tight conditions are pushing smaller tenants into the suburbs, while landlords are seizing the opportunity to convert the existing inventory into lab product and office space.

0 Cape Air targets Boston’s Long Wharf as a seaplane docking spot

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Seaplanes are making waves in Boston.  Boston Harbor last saw seaplanes in the 1940’s and as the congestion continues worsen it appears they will be making a comeback for trips to NYC.

Cape Air targets Boston’s Long Wharf as a seaplane docking spot

The Boston skyline is viewed from Long Wharf.
GARY HIGGINS

By   – Real Estate Editor, Boston Business Journal | 

 

Cape Air has its eyes on a new location on Boston Harbor to launch its long-planned seaplane service between Boston and New York: Long Wharf.

Officials from the Hyannis-based airline will host a public meeting Wednesday, Dec. 18 at the Long Wharf Marriott to discuss “a proposal to serve Boston Waterboat Marina, 66 Long Wharf, with a 9-seat seaplane airline service available to the public.”

Andrew Bonney, senior vice president of planning for Cape Air, said in an interview that the airline has worked with officials including the Federal Aviation Administration, the U.S. Coast Guard and the Boston Planning and Development Agency regarding launching a Cessna Caravan Amphibian between Boston and New York.

Cape Air flights would load at the tip of Long Wharf before taxiing one mile out to Boston Logan International Airport’s Runway 1432 and taking off, Bonney said. The flights would use the same spot for landing.

Before the service can launch, Cape Air would need to obtain a license amendment from the BPDA, which owns Long Wharf.

“The BPDA has asked Cape Air to conduct a community process, including stakeholder outreach, about their proposal for Long Wharf before anything can move forward,” spokesperson Bonnie McGilpin said in a statement. “If there is support for the proposal, BPDA would need to amend the license for Long Wharf to reflect these uses and that would require approval by the BPDA Board.”

If Cape Air receives the city license amendment and other federal regulatory requirements, Bonney hopes to launch by springtime.

A one-way flight would cost between $320 and $340 to travel the 191 miles between the two cities, according to Bonney. Traveling by plane or train from Boston to New York typically takes around three and a half hours, while a seaplane can go downtown to downtown in one hour, he said.

In the 1920s, seaplanes going between Boston and New York would dock behind South Station. But seaplane service hasn’t existed in Boston since the 1940s.

“We think it’s really exciting to be able to bring back this mode of transportation to the city of Boston,” Bonney said.

Catherine Carlock can be reached at ccarlock@bizjournals.com. Follow her on Twitter at @BosBizCatherine 

0 Law firm to move out of One Post Office Square, citing renovation work

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The biggest isn’t always the best.  Fortunately, Boston is chock-full of great work space. What strategies are you solving for & how can we help?

Law firm to move out of One Post Office Square, citing renovation work

One Post Office Square in Boston.
W. MARC BERNSAU

By   – Law and Money Reporter, Boston Business Journal 

Nelson Mullins Riley & Scarborough LLP plans to move its Boston office to One Financial Center next year, in part to avoid the disruption caused by construction in its current home at One Post Office Square, according to its local managing partner.

The South Carolina-based law firm is taking approximately 43,000 square feet on the 35th and 36th floors of One Financial, the office tower across Atlantic Avenue from South Station, said Peter Haley, the firm’s leader in Boston.

It’s about the same amount of space that it currently occupies at One Post Office Square, where it’s been for most of the decade-plus it’s been in the Boston market. But the Post Office Square building is undergoing a major renovation, including a new-look glass exterior, a large-scale interior makeover, and a significant expansion of rentable space. The project is being co-developed by JLL and Anchorline Partners.

According to Haley, had Nelson Mullins stayed in Post Office Square, it would have needed to move at least once, and perhaps twice, within the building over the short term to accommodate the makeover. The firm’s leaders were wary of that level of disruption. JLL “was great” about trying to find a solution, but the firm “couldn’t quite find something that was right for us,” Haley said.

Nelson Mullins expects to move into One Financial in 2020, potentially in August. Haley anticipates the new space will have about 65 offices, with a more efficient, glass-filled floor plan compared to its current location.

The law firm’s local headcount has changed significantly in recent years. In early 2015, it had 60 attorneys in Boston, but by the next year that figure had dropped to 35 after teams of attorneys left for K&L Gates LLP and LeClairRyan PC.

Since then, however, Haley and the firm’s leadership have been aggressive about wooing partners from other Boston law offices. Its local headcount is back up to 53, according to Haley. The new recruits hail from a variety of firms and practice areas: This year alone, its additions include intellectual property attorneys from Pepper Hamilton LLP and Mintz and a litigator from State Street Corp.

“We’ve had a nice ability to attract lawyers from around the city,” Haley said.

That level of growth is reflected in the firm’s recent financials. In 2014, its $298 million in revenue put it outside the 100 highest-grossing law firms in the U.S., according to American Lawyer Media data. In 2018, it grossed more than $400 million across its more than 20 offices, earning it a ranking as No. 87 in the country.

The new address and new names aren’t the only changes coming to Nelson Mullins. Later this month, Haley is stepping down as office managing partner in favor of his colleague, Brian Moore. Haley has been the office’s leader since 2013 and felt a change in leadership would be good for the future of the firm. He plans to return to his practice full-time, although he will hold onto some managerial responsibilities at the firmwide level.

“The turnover’s very helpful in terms of developing and building leadership within the office,” he said. “Just having one person staying there for 10 or 15 years, I think you miss out on opportunities to build future leaders.”