BRA’s very own Wil Catlin was joined by Scott Rickards from Lincoln Property Company and Karla King from EBI Consulting on a Bisnow webinar for a thoughtful conversation about how and when to transition back to our respective offices.
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
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.”
Does the Amazon effect play into retail vacancy in Boston? We, in short yes. How we shop and what we shop for online has changed and will continue to do so. Retail is still vibrant and strong, but not all retail spaces are created equal. Some historical retails spaces are better suited for office which in part has to do their size and proximity to public transit.
An example of this transformation is the Cambridge Side Galleria Mall in the East Cambridge. The red hot Kendal office and lab market will continue to gobble up under performing assets.
An empty storefront near 560 Washington St.
By Tim Logan GLOBE STAFF APRIL 12, 2019
One of the biggest retail spaces in Downtown Crossing may soon become home to offices.
The Boston Planning & Development Agency on Thursday approved plans by the owner of Lafayette City Center to convert much of its long-empty ground floor into office space, perhaps to house the state agency that handles workers’ compensation claims.
The move by veteran Boston developers The Abbey Group highlights the soft market for large-format retailers as they face mounting online competition. The change also has something to do with the particular quirks of the building, which was built in the 1980s as the inward-facing Lafayette Place Mall before being repositioned as storefronts with office space above.
The proposed change also is raising concerns in some quarters about a block and a half of Washington Street in the busy shopping district being converted to office space.
Much of the building’s ground floor — about 75,000 square feet — has been empty for at least 15 years. The last sizable tenant, an Eddie Bauer outlet store, closed in early 2016. Abbey and its brokers have struggled to fill the space. Among other challenges, the first floor is as much as 7 feet higher than street level in places — a design quirk of the old indoor mall and its underground garage.
“We think of ourselves as creative developers who apply innovative thinking to problems like this,” Abbey chief operating officer David Epstein said. “It simply isn’t feasible” to use the space for retail, he said.
But Abbey has leased more than 500,000 square feet of office space on the floors above street level, mostly to tech companies. When the state began looking for 33,700 square feet to house its Division of Industrial Accidents — which needs to move out of the Government Center Garage ahead of a redevelopment there — Abbey offered up the ground floor.
A spokesman for the state’s real estate agency said it received five proposals for the office, including Lafayette Center. A final decision has not been made, he said.
Workers’ compensation courtrooms may not be the sort of retail and restaurant Downtown Crossing is known for, but it fits with other legal offices around the neighborhood, said Rosemarie Sansone, president of the Downtown Boston Business Improvement District.
“This place has been empty for 20 years,” she said. “They found an unusual and interesting use for it. This is all good.”
Still, the shift comes as several key locations sit empty along Washington Street, from Lafayette Center to the long-shuttered Barnes & Noble (which is now being renovated by a new owner) to a cluster of empty storefronts at Washington and Bromfield streets that have been largely dark since plans to build a skyscraper there stalled in 2016.
Sansone acknowledged the empty buildings but also noted that several restaurants and stores have opened in and around Downtown Crossing in recent years. Building owners and the BID, she said, are aiming to bring in more retailers to cater to residents and workers who fill nearby office towers, including a day care center, pet stores, and more home goods stores. She also said Trader Joe’s is considering opening a grocery store in the neighborhood, though a Trader Joe’s spokeswoman would not confirm that.
Some landlords on Washington Street, Sansone said, are being patient, waiting for the right tenant.
“There have been some deliberate attempts to make sure that whatever comes is going to be successful, that it’s what people want,” she said.
One BPDA board member Thursday asked Epstein about the wisdom of leaving retail space like Lafayette Center vacant for years, especially given the effect on foot traffic for neighboring businesses.
“It’s a form of job destruction,” Carol Downs said. “I don’t really understand why this space was let to stay empty for so long.”
Epstein said the market has shifted away from the larger-format retailers it originally envisioned would lease at Lafayette City Center, and the technical challenges of opening in the building were too great for smaller stores. Filling two-thirds of the long empty storefront with office workers will bring foot traffic and, he hopes, will make it easier to rent the rest of the vacant space.
“We’re excited about the prospect,” Epstein said.
The Boston Skyline is on track to change by 2020. It will introduce some new players to the top ten and maintain some existing ones.
Curbed just posted a map of the 10 tallest buildings it expects to stand over Boston in 2020:
- 200 Clarendon
- Winthrop Square Tower
- Prudential Center Tower
- Four Seasons Hotel & Private Residences One Dalton Street
- Millennium Tower
- South Station Tower
- Federal Reserve Bank of Boston
- One Boston Place
- One International Place
- Boston Harbor Garage tower
You can read more about the 10 buildings on Curbed, Boston.
Another major corporate tenant is on the move to Boston. Reebok will surrender is corporate campus life in Canton for a vibrant urban feel.
From the Boston Globe:
Reebok, the athletic shoe and apparel company, plans to shift about 700 employees from Canton to a new headquarters in the city…Reebok president Matt O’Toole said the company is still reviewing a few sites in Boston, all in existing buildings and accessible to southern suburbs and mass transit.
O’Toole cited two reasons for the move. Adidas wants to “clarify the roles” of its offices in the United States. And Reebok wants to be in a vibrant urban area where millennials are eager to work and live. The average age of Reebok employees in Canton is under 30, and many live in Boston already, he said.
Daily garage parking in Boston’s urban core is some of the most expensive in the country. Combine that with our tight office market, and you have a swell of new opportunities across the city. The proposal brought forth by Nordblom is a 230K SF building atop 321 Harrison Avenue.
Designed by SMMA of Cambridge, the office building would be built of insulated glass in a metal panel system with some curtain walls with floor-to-ceiling glazing. The building will have sweeping views of the Financial District and Back Bay and be designed with totally open floor plates with “exceptional” ceiling heights, said Og Hunnewell, a partner with Nordblom Co.
The ground floor would include cultural or gallery space at the corner of Herald Street and Harrison Avenue. Copley Wolff Design Group is the landscape architect. Open space is planned next to 1000 Washington St., an 11-story, 234,900-square-foot office building that shares the site and will be retained.
Nordblom estimates the project would create 1,500 permanent jobs.
The revitalization of the old continues as 40 Water Street makes its debut.
Scott Pollack, principal with Arrowstreet, said in a BBJ article, “It seemed like a real opportunity to serve an interest in the market that otherwise really isn’t being served at the moment.” The block of buildings is situated near Post Office Square, in between Milk Street and State Street — a relatively “dead” block, Pollack said, but one that could be jump-started with new activity…“It is amazing for someone who walks back and forth on this one block from Milk Street to State Street how dead it is,” Pollack said. “The intention of this project is to open it back up and really reconnect these two significant parts of the downtown.”
Jump over to the Boston Business Journal to read the full article.
The Boston office market has big movers that need to make some real estate decisions. The market continues to tighten and blocks of 100,000 square feet and above are harder to find.
From Banker and Tradesman:
Banks continue to move employees into smaller workspaces, with the industry average now 150 square feet per employee, down from 225 square feet in 2009…many banks are [also] choosing to relocate offices. Only 25 percent of the financial services office deals tracked by JLL in 2014 were lease renewals, while 46 percent were relocations.
That trend is likely to continue in Boston, with three major financial institutions responsible for 33 percent of the total active requirements in the market. But the result likely will be a net decrease in occupied space.
Putnam Investments and Wells Fargo are in the market for 280,000 and 220,000 square feet, respectively, while BNY Mellon is seeking to downsize to 350,000 square feet. And available build-to-suit parcels in the Seaport District provide competition to existing office towers in the Financial District.
What’s new at International Place? The donuts have arrived, but get there early!
The opening of Kane’s Handcrafted Donuts at International Place was marked by “a doughnut throwdown worthy of celebrity chef Bobby Flay. Kane’s, which does its frying and baking out of its Saugus store, brought in a batch of its finest…Kane’s has been around since 1955, but it is opening just its second store Wednesday in a tiny 700-square-foot location at street level of Chiofaro’s building,” a Boston Globe article reports.
You can read the article, here.
Boylston Street in Back Bay is closer to adding a new address for a $330 million mixed use project. This is known as Parcel 13, which is on the North East side of Mass. Ave. & Boylston Street.
From The Boston Globe:
Peebles Corp. was chosen over two rival bidders to develop Parcel 13, a rectangle of state-owned air rights at the intersection of Massachusetts Avenue and Boylston Street that stretches over the Massachusetts Turnpike. Peebles now needs to win both state and city approvals to move ahead with the project…The proposed development, designed by Handel Architects of New York and about a block long, would include a 156-room hotel, 88 condominiums, 138 parking spaces, community areas, and 26,000 square feet of retail space. The building’s footprint would stretch from Mass. Ave. to Dillon’s Restaurant & Bar on Boylston Street and would feature a distinctive squiggle shape.