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80 East Berkeley St./Elkus Manfredi Architects
Fresh off signing a 395,000-square-foot office lease in Back Bay, online retailer Wayfair is already scouting real estate for its biggest expansion to date.
The home furnishings e-tailer, which last year rang up nearly $5 billion in sales, is in the market for another 750,000 square feet of office space in Boston to accommodate its rapid job growth, according to commercial brokers.
Wayfair already occupies 506,000 square feet at Copley Place, and will start moving into 395,000 square feet at 500 Boylston/222 Berkeley St. in early 2019 for expansion.
With revenues up 40 percent in 2017, Wayfair apparently has additional plans to grow in Boston, with the intent of leasing 750,000 in the next 24 to 36 months. Space in existing buildings to satisfy that requirement is scarce, with just 838,000 square feet of direct and sublease space available in the Back Bay submarket as of June 26, according to Colliers International research.
So the company may be considering new development in Back Bay or the nearby South End submarket, where developers are moving ahead with 2 million square feet of office and lab projects.
A broker who participated in a presentation by Wayfair said the company has a desire to stay in Boston and ideally wants to expand in Back Bay, but it will have to be flexible and creative to satisfy its large space requirement.
One property that’s been mentioned by industry sources as a possible landing spot for Wayfair is The Druker Co.’s 80 East Berkeley St., a 308,000-square-foot office building approved in 2013. The Druker Co. has held off on groundbreaking until it finds an anchor tenant, Executive Vice President Harold Dennis said last month. The company declined comment on talks with Wayfair.
Also in the South End, Nordblom Co. and partner CIM Group will begin construction next month of a 235,000-square-foot office building at 1000 Washington St. on top of the 321 Harrison Ave. parking garage. Boston-based Abbey Group is seeking Boston Planning and Development Agency approval for 1.6 million square feet of office and lab space at the former Boston Flower Exchange property on Albany Street.
John Hancock Financial Services also has approvals for a 26-story, 625,000-square-foot office tower at 380 Stuart St. in Back Bay, which would replace a nine-story office building. As Hancock prepares to move 1,100 employees from its Seaport District offices to 200 Berkeley St. and 197 Clarendon St. by the end of the year, it’s continuing to work on the Stuart Street tower development plans, a spokeswoman said in March. John Hancock has not announced if it plans to occupy the new tower or lease it to another company.
And Boston Properties has approval for a 26-story tower containing 582,500 square feet of office space as part of its 1.3-million-square-foot South End Gateway redevelopment at the MBTA’s Back Bay station. A groundbreaking date has not been announced.
Wayfair has been on a hiring binge both in the U.S. and overseas, where it has European headquarters in London and Berlin. It added more than 1,000 new employees in the first quarter, bringing the corporate head count up to 8,753, and was on pace for similar growth in the second quarter, Chief Financial Officer Michael Fleischer said in an April conference call. Most of the growth has been in its marketing, merchandising, operations and technology divisions. The company has 3,500 employees based in Boston, spokeswoman Susan Frechette said.
Wayfair’s 506,000-square-foot headquarters lease at Copley Place runs through 2027. The company declined to comment on its real estate expansion plans.
