Nutter hosts ULI program on suburban developmentPrint PDF
On November 30, 2012, Nutter hosted the ULI breakfast forum Going Vertical on Route 128 and I-495: New Development in Boston’s Suburbs. Over 120 professionals from the real estate industry attended this sold-out event in Nutter’s Louis D. Brandeis Conference Center. The program focused on the factors driving substantial new suburban developments.
Daniel St. Clair (Spaulding & Slye Investments) moderated a panel which included Rick Brace (AEW), Paul Cincotta (New England Development), Jillian Rodgers (Red Hat) and Ted Tye (National Development).
Rick Brace presented AEW’s interpretation of the most recent regional labor data. Within the so-called 128 Corridor (i.e., from Route 128 inward to Boston), employment has recovered fully to its pre-recession peak, led by “knowledge sectors” such as technology, financial services, health and education. This labor recovery is fueling the most vigorous development in years, as once-dormant tenants grow and create demand for new and improved office and lab space. AEW counted 25 large developments in greater Boston at the moment, 20 of which have been fully leased before completion.
Several of greater Boston’s ongoing larger developments are programmed as suburban mixed-use. The panelists discussed Market Street at Lynnfield (National Development) and University Station in Westwood (National Development, New England Development and others), each of which incorporates a mix of live-work-play uses, including office, retail, restaurant and multi-family residential. In this development environment, prime tenants are seeking thoughtfully-planned, walkable settings which offer employees dining and shopping options during lunch hour and after work. While panelists could not attribute a specific rent premium to space in mixed-use developments, they spoke of a clear advantage in absorption.
In another example of recent suburban development, Red Hat (working with its landlord and developer, Gutierrez Companies) chose to expand its existing 75,000 square foot office and lab space in Westford by an additional 100,000 square feet. While this single-tenant development is not mixed-use, it shares the same focus on accessibility. Aiming to attract and to retain employees in their early twenties, as well as younger families in their thirties and above, Red Hat’s location offers both access to nearby family-oriented bedroom communities and a shuttle serving Cambridge for those employees preferring a more urban lifestyle.
The panel concluded with a prediction that the current generation of suburban mixed-use developments may be the last of their kind for some time since they are meeting a specific market demand with appropriate supply.