0 Empty store space in Downtown Crossing may become offices

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.

Tim Logan can be reached at tim.logan@globe.com. Follow him on Twitter at @bytimlogan.

0 Vegan Restaurant to Open at 101 Seaport Blvd

Seaport restaurant

Credit: Boston Business Journal

New eats are coming to 101 Seaport Boulevard. This is not your traditional eatery, but rather vegan style with roots in NYC.

A BBJ article notes, “Chef Chloe Coscarelli — known for being the first vegan chef to win the Food Network’s popular reality show “Cupcake Wars” — and co-partner Samantha Wasser have plans to open a 48-seat restaurant at 101 Seaport Boulevard. The newly opened 17-story glass office is home to accounting firm PricewaterhouseCoopers.”

You can read more on the BBJ.

0 Godfrey Hotel in Boston Set to Open its Doors

Boston Godfrey Hotel

Credit: Travel Weekly

DTX is getting its newest amenity online next week, The Godfrey Hotel opening at 505 Washington Street.

“The 242-room Godfrey Hotel Boston was redeveloped out of the adjoining Armory and Blake buildings in the city’s Downtown Crossing district, about a block east of Boston Common…This spring, the property will open a street-level cafe by George Howell Coffee, a local roaster. A 4,600-square-foot restaurant i scheduled to open this summer, but the Godfrey hasn’t announced the restaurateur yet,” according to TravelWeekly.

You can read more on Travel Weekly.

 

0 Most Desirable Office Space for Startups

How does the start up sector communicate with the real estate word?

startup office space

Credit: RE:Tech

According to a RE:Tech Snap Shot study of fifty New York tech startups, “Brokers who forge an early connection with these startups stand to profit handsomely if the firms take off. Several real estate firms are among the fastest-growing tech startups in New York, attracting millions in venture funding…The research survey also found that the vast majority of tech startups favor flexible, short-term leases. Nearly 80 percent of respondents said they favor a sublease over a lease. About 60 percent said their ideal lease term is between three and five years, while the remaining 40 percent preferred a lease term of between one and two years. None of the respondents were keen on five-year-plus lease.”

You can read the full results on RE:Tech.

0 Cloud Computing’s Impact on Today’s Office Space

Office space is used far differently today than 25 years ago. Production is no longer measured by how much time you log in a seat at your desk, but rather what is accomplished by the day’s end. Some jobs still require sitting in a specific seat — lab technicians and receptionists are the two that come to mind — but those restrictions are becoming less and less applicable to the majority of professions.  At our company we offer a wide variety of options for our team members, much of which is a direct result enhanced virtual desktops. Only a few years ago, you had to sit at your desk in order to access your computer and critical electronic files; now your electronic desktop can follow you.

co-working and shared office space infographic

Credit: MBACentral

An article from MBAcentral on coworking spaces observes “the changing nature of business and the workforce [noting] 4 in 10 U.S. workers…will be temps, freelancers or contractors, 8 in 10 Large corporations [are] planning to increase use of flexible workforce, Nearly 90% of businesses have already adopted some cloud computing. [and] 80% of companies offer flexible working arrangements, including telework.”

You can read the full article, here.

0 Commercial Real Estate Portfolio for Macy’s Exceeds Value of Business

Macy's flagship store in NYC

Credit: Bizjournals

When the value of your real estate exceeds the value of your business what do you do?  Macy’s investors are putting pressure on the retail to separate the entities.

According to the Bizjournals website, Macy’s investors are considering “spinning off the 556 stores it owns nationwide, including its 34th Street store in midtown Manhattan, into a separate company…By spinning off the real estate as a separate business, Macy’s would be able to rent out space or even sell part of its holdings at a time when commercial real estate market is hot, and brick-and-mortar retailers are facing greater competition from online sellers. Analysts have suggested the upper floors of Macy’s in Herald Square could be sold off as condos or a hotel.”

You can read more about Macy’s estimated $21 billion real estate portfolio on the Bizjournal.com/newyork.