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The
Busiest Quarter Since 2000 For Industrial In Greater Boston • The Greater Boston industrial real estate market absorbed four million square feet of space in the fourth quarter of 2013, according to a research report released by Transwestern RBJ. • The fourth quarter was the busiest for absorption since 2000. It was the 11th consecutive quarter in which the region’s industrial market had positive absorption, according to the indSTATus report. During that period, occupancy has increased by 6.1 million square feet. • Warehouse vacancies declined from 15.6 percent to 14.2 percent during the quarter, while average asking lease rates rose 8 cents to $5.45. • Flex space vacancies declined from 17.6 percent to 16.9 percent during the quarter, with average asking lease rates up 8 cents to $8.29. • Manufacturing vacancies rose from 12.5 percent to 12.8 percent during the quarter, but average asking lease rates rose 15 cents to $6.55.
BUILDING BOOM
s t c e j o r P t s e g LarStill To Come Developers Plan Massive Boston Redevelopments
Commercial Property Prices Continue To Increase • With the U.S. economy on more solid footing during the fourth quarter of 2013 and demand for commercial real estate space on the rise, pricing continued on a steady upward trajectory in November, according to an analysis by market research firm CoStar. • The two broadest measures of aggregate pricing for commercial properties within the CCRSI – the value-weighted U.S. Composite Index and the equal-weighted U.S. Composite Index – advanced by 0.8 percent and 1.1 percent, respectively in November 2013, and rose by a more robust 10.9 percent and 7.8 percent, respectively, over the last year.
INSIDE The Tradesman Richard Fisher, president of the Associated Subcontractors of Massachusetts, talks about why the economy is still vulnerable. Page B2
A BANKER & TRADESMAN COMMERCIAL REAL ESTATE SPECIAL SECTION
JANUARY 27, 2014
BY JAMES CRONIN | SPECIAL TO BANKER & TRADESMAN
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owntown Boston has undergone significant skyline changes in recent years, but 2014 could see the start of some of the biggest development projects in decades. Across Boston, megaprojects have been approved or are already under construction in neighborhoods from North Station to the Fenway and parts between. Two projects – Fenway Center and the When it’s finished, the Burnham Building will Government Center Garage redevelopment – include 370,000 square feet of office and reare expected to reconnect areas of the cutoff tail space, where a Roche Bros. supermarket by massive roadways and parking lots. Milwill open. The 625-foot tower, being built by lennium Tower will help fulfill the real estate firm Millennium Partdream of a revitalized downtown ners, will house hundreds of luxury crossroads once blighted by decondominiums. Former Mayor molition and empty storefronts. Thomas Menino’s administration And the plans for the TD Garden approved $7.8 million in property and Landmark Center will signifitax breaks for the $630 million decantly increase retail opportunivelopment. ties for area residents. Not far away, HYM Investment “These projects in totality are Group has the green light to start BRENDAN CARROLL part of the present remaking of cenconstruction on its planned 2.4 miltral Boston into a true 24-7 city,” lion-square-foot redevelopment of said Brendan Carroll, head of the Government Center Garage at research for Transwestern RBJ, One Congress St. The plan includes who closely monitors developsix buildings with retail, residences ment in the city to gauge its ecoand offices, with one office tower nomic impact. reaching 528 feet in height. DevelIf and when all five projects oper Thomas O’Brien has said he are built, they will add millions hopes to start building a 480-foot of square feet of new offices, resiapartment tower by the end of the dential units, hotel space and retail JOHN ROSENTHAL year, according to reports. to the Fenway, West End and other downJust up Friend Street is another massive town areas of the city. project in the making. Delaware North Cos. In the center of Downtown Crossing, one and Boston Properties have teamed up to reof Boston’s central transit hubs, the longdevelop the sports complex with three towawaited redevelopment of the old Filene’s ers, one that will stand 600 feet. The new and historic Burnham building into the so$950 million complex will house a 306-room called Millennium Tower has already begun. hotel, about 500 residences, nearly 670,000
square feet of office space and retail space, where Star Market plans to open an underground supermarket. Menino’s team also agreed to $7.8 million in tax breaks for the Garden project. Construction is expected to start within the next 18 months. Across town in the Fenway, two projects promise to continue the remaking of a neighborhood that has seen sleek new residential buildings and restaurants fill empty lots and replace fast food offerings. At Landmark Center, developer Steve Samuels recently gained approvals to demolish the existing parking garage and build 550 residential units, 110,000 square feet of retail, a 75,000-square-foot grocery store and 15,000 square feet of office use and parking. Wegmans will open a new grocery store in the complex’s retail space. Heading north along Brookline Avenue, developer John Rosenthal has been waiting to build Fenway Center, a $500 million plan for five new buildings across 4.5 acres, part of which will sit on decking above the Massachusetts Turnpike. The new properties would hold 550 residential units, 1,200 parking spaces, 80,000 square feet of groundfloor retail and 163,000 square feet of office space. Rosenthal has won all city and state approvals for his project, which is expected to create 1,800 construction and 750 permanent jobs. Yet he says he still needs about $7.8 million in tax relief, the same amount given to the TD Garden and Millennium Tower developers, to make the project work. “We are shovel ready, we’re financed, and we’re standing on third base,” Rosenthal said. “We simply need a tax agreement to finally bring Fenway Center home and build this city’s first major air rights project in more than three decades.” n
A Landmark Decision The Boston Redevelopment Authority gave the green light to the $500M makeover of Landmark Center in Boston’s Fenway neighborhood. Page B7
The new Yawkey commuter rail station, left and center, built near the proposed $500 million Fenway Center, shown in a rendering, right.
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