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0 WeWork’s ‘core business is a great business,’ real estate expert says

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Catlin oversees the firm’s Commercial Leasing Division and says there is still “significant demand” for co-working office space in Boston. “I don’t see the market going anywhere. Matter of fact, I think it’s going to continue to strengthen.”

By Jen Rogers | Yahoo Finance October 22, 2019

For all the negative headlines about a cratering valuation and cash crunch, WeWork’s co-working business is real. “I think the core business is a great business,” William Catlin, Partner and Managing Principal of Boston Realty Advisors, told The Final Round on Yahoo Finance.

Catlin oversees the firm’s Commercial Leasing Division and says there is still “significant demand” for co-working office space in Boston. “I don’t see the market going anywhere. Matter of fact, I think it’s going to continue to strengthen. It definitely will not strengthen at the rate that WeWork was absorbing space for. But there’s a lot of other players wishing to take a role in this space.”

On Tuesday, news emerged that WeWork, which was slated to become one of the year’s hottest IPOs, will be bailed out by SoftBank at deal valuing the co-working space at less than $8 billion (a long way from the $47 billion WeWork said it was worth in January).

The issue for competitors hoping to take share from a wounded WeWork is that landlords aren’t so eager to work with new players. That oddly might just help the incumbent — WeWork.

“I think there’s a huge barrier to entry now, because we’re working on a number of different transactions on different sides of these transactions where everybody has been reading the WeWork debacle and nobody wants to talk to anybody in flexible workspace, in regional HQ space or anything. So anybody in this space is fighting a bit of an uphill battle, because what landlords are looking for now is a colossal amount of security deposit because of the WeWork effect.”

He says WeWork may have been willing to “overpay and or might do a longer-term lease,” but with the one time juggernaut stepping off the gas, the dynamics are changing. The so-called WeWork effect should eventually lead to a right-sizing of deals, according to Catlin.

“The market might throttle back to where reality is … and as a result of that, transactions will start to ignite again.”

0 Oxford kicks off plans for first Boston tower

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Oxford kicks off plans for first Boston tower

Oxford Properties’ proposed office tower at 125 Lincoln St. in Boston would span 625,000 square feet.

Oxford Properties’ proposed office tower at 125 Lincoln St. in Boston would span 625,000 square feet.

Oxford Properties has kicked off development review, one of the first steps in the city’s approval process, for its first ground-up tower in Boston, a 24-story office on the edge of Boston’s Chinatown neighborhood that will span 625,000 square feet when complete.

Oxford is the real-estate arm of Canadian pension fund OMERS, and has more than two dozen new development projects in the work worldwide. The tower at 125 Lincoln would be Oxford’s first new construction in Boston, outside of its redevelopment work at 500 Boylston/222 Berkeley, 125 Summer St. and other offices.

Mark McGowan, Oxford’s vice president and head of development in Boston, said the company has not yet determined whether to wait for a tenant to lease space prior to construction, or to build on a speculative basis.

Oxford Properties has pitched a 24-story office at 125 Lincoln St. in Boston.

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Oxford Properties has pitched a 24-story office at 125 Lincoln St. in Boston.

The 125 Lincoln development will include revamping the corner of Lincoln Street and the Rose Fitzgerald Kennedy Greenway and adding 4,100 square feet of retail space along Beach and Lincoln streets. It will also include 7,000 square feet of public indoor space including retail, gathering spaces and an “all-season indoor/outdoor space available for public gathering and community functions and events,” McGowan wrote in a June 7 letter to the Boston Planning and Development Agency.

Oxford bought the existing five-story property at 125 Lincoln St. in 2017 for $40 million. The property has some office and above-ground parking, but its ground floor houses both C-Mart Supermarket and Hei La Moon — a grocery store and restaurant that are culturally significant to Boston’s Asian community. McGowan said Oxford recognizes that importance.

“Because those are cultural institutions, we’re really focused on making sure whether there’s a place for them back in the building or a great relocation option. We’re serious about that,” McGowan said in an interview. “For us as a long-term owner and operator, an important piece of the project is making sure that they are all treated well, and we can figure out what the best long-term place for them is. We’re super sensitive to that.”