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| Boston: City For The 21st Century |
Rajiv Laroia CPA, Principal , Laroia Realty
12/10/2007
Boston has been long regarded as the walking city of America. With its tightknit residential neighborhoods, its boulevards lined with cafes, shops, and parks, makes Boston one of the best cities for a stroll. A report by the Brookings Institution ranked Boston the second best city for walking, ahead of San Francisco, Denver, and Portland, Ore and even NYC. Despite best intentions, Boston's comparison to NYC never ceases: "Yankees vs. Sox. Jets vs. Pats. New York Marathon vs. Boston Marathon. Central Park vs. Boston Common. MoMA vs. ICA. Luxury condos with great views of the Manhattan skyline at $2,000 a square foot and up vs. views of Boston Harbor at $1,000 a square foot and up. New York has led the way in super-luxury high-rise living. But elite lifestyles in little old Boston are catching up." NYC is vibrant but so is Boston. Demographics (Baby boomers), immigration, healthcare, education, finance, bio tech, world class city status, largest New England city status continue to ensure Boston's place as an important city of America. Since 1949, Boston has been one of the 5 strongest real estate markets in the country (Business 2.0). According to the Office of Federal Housing Oversight (OFHEO) Massachusetts' house prices have increased by 635% since March, 1980. The nation is getting older as the oldest boomers, representing the richest generation in american history, turn 60 this year. Aging baby boomers and empty nesters are moving back to the cities such as Boston.................... "Strong household growth, combined with record incomes and wealth, is expected to lift housing investments to new highs in the next 15 years," according to Eric Belsky, executive director of the Pew Hispanic Center. Sometime in mid-October 2006, we became a nation of 300 million Americans. New household formation is expected to reach 14.6 million over the next ten years. US population will reach 400 million by 2040. Population increase of 100 million over 35 years will certainly equate with increased housing demand. Where will this demand be? Will it be in Boston? In recent months, much has been written about Boston's real estate market . Much has been debated about the direction of the market. Perhaps it is time to set aside our intellectual musings as the year comes to an end and focus on the growth that Boston is undergoing. Despite local zoning regulations that slow down the construction process in Boston and Massachusetts, the city, presently, has in its pipeline development projects totalling $8+ billion...projects that will evolve the city into a city for the 21st Century. SEAPORT DISTRICT: Hynes, along with development partner Morgan Stanley, is building one of the largest projects -- covering a 12-block neighborhood -- in this emerging part of the city. Seaport Square, on 23 acres of parking lots formerly owned by Frank H. McCourt Jr., could cover 6 million square feet when complete. It will include residential buildings, office space, restaurants, retail space, and a large park. One essential element in a successful neighborhood is a place for the arts. "Some of the most vibrant areas of the city have these elements, and they've taken hundreds of years to evolve," Hynes said. "They've grown organically. We're trying to do that overnight." The project is expected to cost approximately $2.5 billion and, once fully approved by the BRA, will be completed by 2015. Hynes is president of Gale, which developed the successful One Lincoln Street (State Street Building). FAN PIER: The entire project is estimated to cost $3 billion. Local developer Joseph Fallon, who bought the property from Pritzker in 2005 for $115 million, broke ground in September for an 18-story office building. Next, says Fallon, will be a five-star hotel and luxury condominiums. Fallon's wider plan, on the equivalent of nine city blocks, calls for a $3 billion development including three office buildings, more than 1 million square feet of waterfront residences, boutiques, restaurants, and cultural facilities. The latter category is already flowering with last year's opening of the Institute of Contemporary Art. Fallon is excited about designing a marina where the super-rich can moor their yachts. In fact, he sees them "lined up like in Monte Carlo." EXETER STREET: Boston Properties is developing a 30-story, 200-unit residential apartment tower on Exeter Street. The building would be 340 feet high. ONE KENMORE: This proposed project for the land just west of Brookline Avenue, known as Parcel 7, calls for 1.22 million square feet, with 353 residential units, about 220,000 square feet for office space, 108,000 square feet of retail space, and parking for about 1,344 cars. The plans also include three towers of 7, 13, and 17 floors. The builder, Rosenthal, has negotiated with the city and organizations in the area, including the Boston Red Sox, to reach an agreement on details of the project, called One Kenmore. Estimated cost is $300-400 million and will take 3-5 years to complete. Developers of this project are Arthur Winn and Roger Cassin. TRILOGY: a $220 million multiuse building opened in The Fenway in 2006. The total built out area of 650,000 square feet included 580 apartments, 500 parking spaces, 17 floors and 50,000 sq feet of retail space. 1330 BOYLSTON: The cost of this project, scheduled to open in 2008, is $100 million. Included in this development are 70 apartments, 140 condominiums, 293 parking spaces and 14 floors. The total floors space of 340,000 includes 25,000 square feet of retail space and 85,000 square feet of office space. HOTELS: Within the next month, the 308-room Liberty Hotel is set to open at the foot of Beacon Hill, a project that included redeveloping the former Victorian-era Charles Street Jail. Other Boston hotels scheduled to open within the next nine months include the 471-room Marriott Renaissance Hotel on the South Boston Waterfront, the 150-room Regent Boston Hotel at Battery Wharf in the North End, and the 149-room Mandarin Oriental Hotel on Boylston Street next to the Prudential Center. Hotels with a total of 2,342 more rooms have been approved or are nearing the construction stage. CITY'S TALLEST TOWER: Still in the planning stages is the city’s tallest tower to be built at Winthrop Square, which would replace a parking garage with a 75-story glass office building. SOUTH STATION: Hines – an international firm whose headquarters are in Houston – is working with BRA on a proposal to build a 40-story office tower at South Station. LEATHER DISTRICT: Lincoln Property Co. has commenced construction on its Two Financial Center project, a 12-story office building in the city’s Leather District that will consist of 212,000 square feet of office space. MEDICAL RESEARCH AND DEVELOPMENT: Presently, 1.26 million square feet of medical research space is under construction in Boston, primarily in the longwood medical area and adjoining sections. AND so on................Thus, my friends, Boston and metro Boston (Brookline, Cambridge, Newton, Somerville) will continue to evolve irrespective of what the short term holds. In my opinion, the question is not whether we will be able to attract people to Boston as the US population increases to 400 million (from 300 million today) but whether we will be able to attract them in numbers to make the above projects viable......for now the city of Boston is bettting on meeting its numbers. Wishing you all Happy Holidays and a Happy New Year!
ONE FRANKLIN STREET. The $700 million, 39-story, multiple use project is scheduled to begin construction in about a year and open in early 2011. The new tower will include a 280-room hotel, 125-seat restaurant, 475,000 square feet of office space, 166 residential condos, 300,000 square feet of retail space, and an adjacent park. A new Filene's Basement will occupy four lower levels. The developer is a team of Gale International, led by John B. Hynes III, and Vornado Realty of New York, who have hired Elkus/Manfredi Architects. (Thomas C. Palmer Jr.)
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