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After more than a decade of delays, commercial development is under way at the 45-acre NorthPoint site with a 430,000-square-foot office-lab building.
Jeff Bezos may or may not knock on DivcoWest’s door begging to build Amazon’s new headquarters at its NorthPoint site, but the development company is poised to offer new construction of office and lab buildings to meet life science and tech firms’ often-swift timetables for occupancy.
DivcoWest, which purchased the sprawling development site in 2015 from HYM Investment Group and Canyon Johnson Urban Funds, is constructing a 430,000-square-foot office-lab building on its parcel J-K at NorthPoint. With site preparation under way since this summer, the parcel is home to DivcoWest’s first commercial development at NorthPoint – and it’s being built on speculation.
It’s the first step in what could be up to 2.2 million square feet of commercial buildings that are approved for the 45-acre former rail yard located in Cambridge, Boston and Somerville.
There’s an outside chance that a non-life science firm (or firms) might nab the eventual 430,000 square feet of space on parcel J-K, but most real estate sources expect DivcoWest will sign up a life science company to fill planned “lab-capable” space in the final J-K structure.
The San Francisco- and Boston-based developer’s goal: To turn NorthPoint into the latest relief valve for Cambridge’s booming Kendall Square, less than a mile away and nearly bursting at the seams with biotech, pharmaceutical and medical device firms.
Three residential towers have been built on the property, but commercial development has been slower to emerge despite the building boom in nearby Kendall Square.
Cambridge now faces increasing competition for lab tenants in the urban core, with developers targeting life science users in emerging markets such as the Seaport District, Boston Landing in Allston-Brighton and 401 Park at the Landmark Center in the Fenway.
“It’s a little bit of a test,” Iram Farooq, assistant city manager in Cambridge, said of NorthPoint’s prospects. “From our perspective, it’s exciting. We’ll see what goes there.”
Retail As A Loss Leader
DivcoWest is moving forward with 100,000 square feet of retail space to make the largely-barren NorthPoint site more attractive to office and lab tenants. Announcements on the first batch of stores and restaurants are expected shortly, said Keith Wallace, a senior managing director at DivcoWest.
“We need to lead with retail to drag in big tenants that are making big decisions with their employee base,” Wallace said at a recent NAIOP Massachusetts forum. “We think it’s important for the site, and it’s going to help us make money for our investors.”
David Begelfer, CEO of NIAOP Massachusetts, said it’s a distinct possibility.
“Kendall Square is still the top zip code” for life-science firms wanting to locate in Cambridge, he noted. But some firms, looking for slightly less pricey environments, may decide that NorthPoint is worth a look, he said. Begelfer said he has “no doubt” that NorthPoint is eventually going to become a commercial success.
Asking rents for East Cambridge lab space hit $75.48 per square foot in the second quarter, according to Transwestern Consulting Group’s mid-year bioSTATus research report.
One prominent real estate developer, who asked that his name not be used, said DivcoWest seems to be borrowing a page from Alexandria Real Estate Equities. Alexandria built out 100 Binney St. in Kendall Square, with most people expecting to fill it with life science tenants.
It partially did, landing Bristol-Myers Squibb as anchor tenant and four other venture-backed life science companies. But 100 Binney garnered the biggest headlines in August when Facebook committed to nearly 130,000 square feet as it expands its Cambridge workforce by 500 employees.
NorthPoint’s size and location have put it on the short list of Greater Boston sites mentioned as an option for Amazon’s second headquarters. But it’s permitted for only a fraction of the 8 million square feet that the e-commerce giant said it needs for an estimated 50,000 employees.
DivcoWest also recently applied to the Boston Planning and Development Agency (BPDA) to increase the previously-permitted height of future buildings on parcels G and H at NorthPoint, to accommodate ventilation and other equipment associated with lab buildings. Both parcels straddle the Boston-Cambridge line.
The proposed revisions increase the parcel G lab building from 150 to 248 feet and an office building on parcel H from 150 to 175 feet.
David Carlson, deputy director of urban design at the BPDA, said NorthPoint will be a big plus for the region’s innovation economy.
“Boston’s interest is to capture as much of that (innovation) activity as possible,” Carlson said.
