Global Atlantic Financial Group’s decision to pull up stakes in Southborough and relocate 154 employees to Boston Landing late this year is the latest validation of New Balance’s strategy to grow in place in Allston.
The sporting goods manufacturer has filled all 228,000 square feet of office space it left behind at 20 Guest St. in 2015 when it moved to its eye-catching new headquarters overlooking the Massachusetts Turnpike. As it continues buildout of its 1.8-million-square-foot Boston Landing mixed-use development, New Balance paid for the first privately-funded MBTA commuter rail station, which is scheduled to open May 22 at the edge of the 15-acre property. That restores a rail connection missing in the neighborhood since deactivation of the Green Line’s A branch in 1969.
“The train station was a big factor in (Global Atlantic’s) decision,” said Jim Halliday, managing director of New Balance’s real estate arm NB Development. “People think of it bringing people into the city, but we also looked at it as an important way to get access to the urban labor pool that a lot of companies are looking for.”
Halliday declined to give the latest cost estimate for the station, originally scheduled to open in 2014 with a projected cost of $20 million.
Insurance and retirement fund manager Global Atlantic is the latest employer to leave behind a single-use suburban office park for a city development with apartments, restaurants and public transit connections.
The Boston Bruins arrived at Boston Landing last summer, baptizing their new Warrior Ice Arena practice facility at 80 Guest St. that’s routinely booked for public skating and club hockey 18 hours a day. The Celtics are on their way in spring 2018, with construction proceeding on a new training facility to replace their 18-year-old home in a Waltham office park.
Both facilities will include office or lab space, part of an emerging job cluster on the western fringe of the city. NB Development is marketing the space to suburban companies looking for a high-energy environment, and life science firms unable to find or afford space in low-vacancy Cambridge, Halliday said.
An undisclosed office user has signed a letter of intent for three and a half floors at 80 Guest St., Halliday said, and life science companies have expressed interest in additional space in the building. There’s also a build-to-suit pad for 325,000 square feet of office and lab space at 60 Guest St. Next steps would include a 400,000-square-foot track-and-field complex and 175-room hotel.
The neighborhood’s revival has intensified interest from multifamily developers seeking to acquire commercial properties, said Michelle Ciccolo, CEO of The Coccolo Group, who is advising Village Automotive Group on redevelopment of its two Allston properties spanning over five acres.
Ciccolo, the daughter of Village Automotive founder and President Ray Ciccolo, said the company has been deluged with offers to acquire its North Beacon Street properties or partner in joint ventures. After exploring the alternatives in Allston, Watertown and Newton, it decided to redevelop the existing property.
“Ultimately we decided we weren’t going to find a better location than here. We’re very excited about the new commuter rail station and the opportunity to grow here,” she said.
Boston-based architects Arrowstreet are designing a master plan including renovation of Village Automotive’s historic 61 North Beacon St. property into a new showroom. It’ll lease out 28,000 square feet on the upper floors to office or R&D tenants.
Village Automotive is still exploring plans for redevelopment of its 75 North Beacon St. property with three new buildings, including a potential multifamily housing component.
“It doesn’t take a rocket scientist to see what’s going on in Allston, and the highest and best use for the dealership was not a single-story building with 400 parked cars,” Michelle Ciccolo said.
Developers Test Condo Market
Long a renter-dominated neighborhood with aging housing popular with students, Allston-Brighton has become the city’s third-busiest residential development market. The Boston Planning and Development Agency has approved 2,246 housing units in the neighborhoods since 2014.
Samuels & Assoc.’s 325-unit Continuum luxury apartment complex on Western Avenue, completed in late 2015 with studio rents starting at over $2,400, hinted at the neighborhood’s potential for higher-end housing. More is likely in the pipeline, with Boston-based developer Mugar Enterprises and Stadium Auto Body acquiring nearly 4 acres of commercial properties along Western Avenue last October. No formal development plans have been submitted.
A 295-unit apartment complex at Boston Landing is scheduled to open in June 2018 in a joint venture between NB Development and John Hancock Financial. At its 11-acre property next door, Stop & Shop Supermarket Co. has revealed plans to redevelop its existing grocery store and build more than 1,000 residential units.
Now developers are set to test the neighborhood’s ability to absorb luxury condo development.
Since November, The Davis Cos. of Boston has pre-sold 68 percent of the 85 units at Telford 180, a 6-story complex under construction off Soldiers Field Road. Prices are averaging between $800 and $850 per square foot, said Sue Hawkes, CEO of The Collaborative Cos., compared with the neighborhood average of $500 per foot.
“The absorption we’ve achieved at Telford 180 provides there was a real dearth of (condo) product in the area,” Hawkes said. “There were a lot of apartments and older product that was conversions of two- and three-family properties, more of the classic student housing. But if people wanted to stay in the area, there was no opportunity to buy in a new building.”
Stephen Davis, vice president of development for The Davis Cos., said transformative projects such as Boston Landing and Harvard University’s new School of Engineering and Applied Science prompted the company to invest in its first Allston project when it acquired the Telford 180 site in 2014.
“It seemed like an opportunity to hit a dramatically underserved piece of the buyer market,” Davis said.