The city-owned Winthrop Square Parking Garage, at 240 Devonshire Street, recently closed due to serious structural problems. Built in the 1960s, this Boston garage accommodated 550 cars at discounted rates from the much higher priced private facilities.
This now further exacerbates the commuter parking problem, already destabilized by the continuing loss of surface parking spaces due to the heated development activities in the Seaport area. Employers may soon start to hear the complaints, as workers begin to personally absorb these increased costs.
The “dirty secret” is that the only reason the Financial District’s parking freeze has worked for so long was that there was a large surplus of low-cost parking nearby. The same goes for the Seaport’s parking freeze. As more buildings eat up the surface lots, fewer spaces will remain – as demand increases substantially.
Commercial parking freezes are an ineffective means of providing cleaner air, especially when they are targeted exclusively at a particular municipality. An unintentional result of a parking freeze is its negative effect on economic development, limiting the ability of new businesses to create jobs, existing businesses to expand, and leading, in many cases, to shifting growth to areas without such restrictions.
Maybe now is the time to rethink this outdated method of controlling auto emissions.
Three signs that spring has finally arrived in Boston: 1) green grass on the Esplanade, 2) the Red Sox back at Fenway Park, and 3) NAIOP MA’s Annual Bus Tour. The 11th edition of the tour took place on Wednesday as more than 250 people aboard five buses toured properties along what is suddenly one of the hottest stretches in commercial real estate in the region: the Route 128 Corridor from Needham to Lynnfield. Here’s a summary:
- Needham’s Economic Development Director Devra Bailin, discussed efforts to rebrand the former New England Business Center as Needham Crossing
- Justin Krebs and Mark Roopenian described two of Normandy Real Estate Partners’ projects along the route:
- Center 128, which will redevelop Needham’s former New England Business Center into an 825,000-square-foot “super-park,” including a Marriott Residence Inn Hotel
- Station at Riverside, which will transform MBTA’s Riverside Station into a mixed-use development featuring 295 apartments, a 10-story 225,000 square foot office building, and a 20,000 square foot retail village
- Mike Wilcox of The Bulfinch Companies discussed development at Needham Crossing and the branding and leasing efforts at Atrium Center. Wilcox concluded with an exciting Atrium Center video that you can see here.
- In his market overview, Jeremy Grossman of CBRE/Grossman Retail Advisors noted the “flight to quality” among retailers, New Urbanism, the continued expansion of restaurants, the intensifying battle among grocers, and the strengthening of regional markets such as Chestnut Hill, Lynnfield, and Northborough as key trends
Six tour buses, escorted by members of the MA State Police, traveled along Route 128 beginning in the Needham/Newton area and ending in Lynnfield. Here are a few highlights:
- The ongoing transformation in Chestnut Hill, including New England Development’s Chestnut Hill Square, WS Development’s The Street, and The Bulfinch Companies’ Atrium Center at Chestnut Hill
- Progress at 1265 Main Street, the former Polaroid site in Waltham
- New opportunities at Davis Marcus Partners’ Reservoir Woods in Waltham
- Redevelopment at Boston Properties’ Waltham-based Bay Colony office park
- Retail and entertainment center 3rd Ave Burlington, part of Nordblom’s NorthWest Park, which will also include a 140,000 square foot Wegmans
The tour stopped in Lynnfield for lunch at MarketStreet Lynnfield, a 680,000 square foot mixed-use development currently under construction. Inside a space that will become a Shoe Market store, WS Development’s Tom DeSimone and National Development’s Ted Tye shared details of the joint venture scheduled to open in August 2013.
When complete, MarketStreet Lynnfield will include 395,000 square feet of shops and restaurants, 80,000 square feet of office space, 180 residential apartments known as Arborpoint at MarketStreet, and the 9-hole King Rail Reserve golf course.
I caught up with a few people on tour. Here’s what they had to say:
- Tom DeSimone, partner, WS Development: “There’s no better way to understand real estate than to actually be there. The NAIOP Bus Tour gets you closer to the real estate by providing an introduction. Then you can go back and look at whatever may have peaked your interest.”
- Ted Tye, managing partner, National Development: “It’s great to people out here having a nice day, getting out from behind their desks, and seeing some projects that are being built. And, it’s incredible that in 2013 that we actually have things being built.”
- David Chilinski, co-founder and president, PCA: “The best part of the NAIOP Bus Tour is that you really get a sense of what’s happening and, importantly, what’s new in the marketplace. We all know the tried and true properties, but the tour lets you see new projects as well as cases where people are reinventing or adding to projects. That’s the importance of this tour.”
- Sarah Walker Weatherbee, managing director, Keller Augusta: “You get a sense of history as well as what the future holds for the Boston-area markets like the ones we saw today. And, the networking that the Bus Tour enables is unique to NAIOP—that really makes the day exceptional.”
While here, please read David’s important post below about National Development’s Roseann Sdoia, who was seriously injured in the Boston Marathon bombings. David includes a link to Roseann’s Recovery Fund for those who wish to donate toward expenses for Roseann’s treatment and recovery.
All of us at NAIOP Massachusetts are saddened by the tragic events that occurred at the Boston Marathon on April 15. Times like these make us realize that Boston is basically a small town – it seems like we are all either connected directly, or by one degree of separation, from someone hurt in Monday’s explosions.
Governor Patrick and Mayor Menino announced the creation of One Fund Boston, which was established to provide assistance to those who were directly impacted by the tragedy. The local business community, including several NAIOP members, immediately stepped up to support the fund. We encourage the commercial real estate industry to show its support. To learn more, or to make a contribution, visit http://onefundboston.org.
In addition, we’ve learned that Roseann Sdoia of National Development, a NAIOP Gavel Firm, was severely injured in the explosions. Her friend set up Roseann’s Recovery Fund, where you can donate towards her treatment and recovery expenses. Our thoughts are with Roseann and the many other victims hurt by this tragedy.
On March 28th, I testified on Mayor Menino’s proposed Energy Disclosure Ordinance before Boston City Council’s Committee on Government Operations. Neither of the two major real estate trade associations were asked to be involved in the development of this ordinance. After it had been developed, NAIOP submitted detailed comments in October on a draft summary of the ordinance. Unfortunately, none of our recommendations were incorporated in the final version that went out for public comment in February.
Brian Swett, Boston’s Chief of Environment & Energy, testified at the hearing in support of the ordinance along with representatives from other cities that have energy disclosure programs in place. They agreed that because of these programs owners were better able to make investment decisions for their properties once they had information about their tenants’ energy use. Interestingly, no one explained the value (if any) of publicly disclosing this information (as is required under the current draft ordinance). While some property owners did testify in support of the program, many others expressed serious concerns with what was proposed.
During my testimony, I offered the following four critical changes to the ordinance:
1. Utility companies should be required to obtain tenant energy data and the reporting requirements should be delayed until such a system is in place.
In many buildings, owners do not have access to the energy data for separately metered tenants. NAIOP believes that the utility companies should be responsible for submitting this data to building owners, and the reporting requirements should be postponed until such a system is in place. Furthermore, utilities should provide such information to building owners no later than 4 months prior to the first reporting deadline to ensure adequate time for compliance.
2. Multifamily properties should not be included in the ordinance.
As currently drafted, this program would be very difficult to implement for multifamily property owners, due partly to the fact that the Energy Star Portfolio Manager tool is not designed to adequately measure multifamily properties. Like many of the other cities that have adopted similar energy disclosure requirements, we believe that Boston should not include multifamily properties in the ordinance. However, if the City chooses to require them to comply, the reporting dates should be delayed by two years. Furthermore, owners should not be required to comply until a tested and proven tool for this product type is developed with input from an industry advisory committee.
3. Involve landlords & owners in determining the disclosure strategy and allow for changes to the program before publicizing data.
Given the significant impact such a rating could have on individual buildings, property managers and landlords must be involved in determining how such information would be made public. Several other cities that have required energy disclosure allowed for a one year trial where the energy data was reported, but was not available to the public.
4. Involve NAIOP, other industry groups, and property managers & building owners in developing regulations and overseeing the program’s implementation.
Much of this program will be left to interpretation by those developing the regulations. We urged the City to formally include representatives from multiple industry groups representing retail, residential, lab, and office space, as well as individual property managers and building owners on the regulatory task force.
A vote on the ordinance is required by April 25. The Chair of the Committee, Councilor Matt O’Malley, has indicated that he will be scheduling a working session in the near future to discuss potential modifications to the ordinance. NAIOP looks forward to participating in the working session. If the City Council votes favorably on this ordinance, we are hopeful that our comments and those of the vast majority that testified will be included in the final language.
The following appeared in the February 24, 2013 edition of Banker & Tradesman:
Cranes are once again dotting the landscape. Boston, Cambridge and the suburbs are bustling with new economic development opportunities featuring office, retail, residential, lab, and mixed use projects. Absorption rates are up and previously proposed developments are seeing new life. The commercial real estate industry in Massachusetts is alive and well. Through its government affairs efforts, NAIOP Massachusetts, the Commercial Real Estate Development Association, worked diligently in 2012 to stimulate the industry’s recovery. Increasing predictability and eliminating red tape were top priorities.
As an example, NAIOP strongly supported the Jobs Bill, An Act Relative to Infrastructure Investment, Enhanced Competitiveness & Economic Growth in the Commonwealth, which was signed into law in August. The law included many of NAIOP’s top legislative priorities including an extension of the Permit Extension Act. Permits and approvals in effect at any time between August 15, 2008 and August 15, 2012 were extended by four years. This affected all properties: commercial, housing, business expansions, universities, hospitals, and infrastructure projects. The bill also made important improvements to District Improvement Financing and the Infrastructure Investment Incentive (I-cubed) program. In addition, it created a new Local Infrastructure Development Program that provides developers and municipalities with a new tool for leveraging private funding to finance critical infrastructure projects. The bill was the result of a close collaborative effort by the House, Senate, the Governor’s economic team, and the business community.
Looking ahead, NAIOP is gearing up for an action packed year. The 2013 – 2014 legislative session kicked off in January and NAIOP filed numerous bills affecting the development, ownership, management, and financing of office, lab, industrial, multifamily, and retail space in Massachusetts.
A top priority for NAIOP is the extension of the Brownfields Tax Credit, which is set to expire this summer if no legislative action is taken. This tax credit is a proven success. It protects public health by providing an incentive to clean up contaminated land and redevelop formerly blighted sites into economically vibrant properties. However, developers need certainty and predictability – especially when making long-term investments. Without swift action by the Legislature to renew this tax credit, many new projects will not move forward.
NAIOP will continue to advocate for reform of the Facilities of Public Accommodation requirements under Chapter 91, the law governing waterfront development. Existing law requires virtually all of the ground floor of a waterfront building to be accessible by the public. This requirement results in countless vacant and underused spaces. NAIOP’s bill would create more flexibility for ground floor uses, while continuing to create public access to the waterfront.
NAIOP will also pursue legislation that would create a single, uniform statewide energy code. The bill would ensure Massachusetts remains a leader in energy efficiency while creating a level playing field for all communities. Building on that concept, NAIOP will also be focused on climate change preparedness. Given the impact of recent storms, the industry must be prepared for more frequent and severe weather events. Practical steps are needed to shield existing properties and infrastructure from irreparable damage. The Commonwealth’s economic survival is at stake.
On the regulatory front, NAIOP will continue to support the Patrick Administration’s massive, top-to-bottom regulatory review for all state agencies. NAIOP was part of the Business Regulatory Review Advisory Committee that recommended which regulations should be rescinded, modified, and or made more consistent with a national model or standard. Earlier this year, Governor Patrick announced that 446 sets of regulations had been reviewed, leading to 286 opportunities for reform. NAIOP looks forward to the continued implementation of this effort. The Massachusetts Department of Environmental Protection is expected to finalize and implement 21 regulatory reforms in the coming weeks. Also supported by NAIOP, the reforms will make a substantial improvement on the cost and time expended by the regulated community, without diminishing environmental protection.
While Massachusetts is doing well compared to the rest of the nation, the Commonwealth’s recovery is still fragile. In 2013, NAIOP will continue to urge legislators and regulators to do all they can to ensure Massachusetts retains its competitive advantage.
The real estate industry has lost another of its icons with the passing of Rodger Nordblom. Massachusetts has been blessed with a number of pioneers in the commercial real estate business who have had a major role in the sculpting of our cityscapes, creating workplaces for generations of innovative businesses that have grown here. Not only have these individuals been active participants in our economic development, but they have been civic and charitable leaders, giving of their time and resources to so many organizations that have impacted all of our lives.
Rodger Payson Nordblom
- July 5, 1927 – February 10, 2013
- Concord, Massachusetts
Rodger Payson Nordblom, 85, died peacefully while in Palm Desert, California on February 10, 2013. Born July 5, 1927, he was the son of Robert C. and Marjorie C. (Payson) Nordblom.
He graduated from Milton Academy, Milton MA in 1945, whereupon he served in the US Navy. Subsequently, he graduated from Harvard University in 1950, where he was captain of the ski team for 2 years. He married Mary Winder Crocker of Fitchburg, MA on September 9, 1949. Together they raised their five children in Concord MA, instilling in them their love of the outdoors, sports, and most importantly, family values. His beloved wife, Mary Winder, passed away on September 7, 2001 after 52 years of marriage. Traveling to California, he met Dawn Chandler whom he married on March 14, 2003. Together they traveled extensively to remote parts of the world and enjoyed 10 years of marriage.
Rodger was the third generation in Nordblom Company where he was President for twenty-five years. He was an outstanding leader in the Boston real estate industry as a pioneer in the development of commercial properties following the construction of Route 128 in the late 1950′s. Throughout the 1960′s and 70′s he developed millions of sq ft of commercial buildings in Greater Boston and was recognized by his peers as president of SIOR in 1977. Rod was always active in the Boston community, including his recent involvement with WGBH, Boys’ and Girls’ Club of Boston and the Museum of Science.
Whether parasailing on his 85th birthday or exploring remote villages in India, he embraced life with enthusiasm and an adventurous spirit. His positive outlook carried him graciously through life’s trials including his own health challenges. Rod was unfailingly fair and always was guided by what he believed to be right both in business as well as his personal life.
He was a mentor to many generously sharing his wisdom and experience therefore empowering those around him. As a result of his deep love for writing and photography, he also authored a number of books. Rod was a gentleman loved and respected by all and he will be best remembered for his kindness and generosity.
Rod is survived by his wife Dawn, her son Danny Chandler of Texas, her daughter Julie Chandler of Raleigh, NC and Rod’s five children, Anne Dodge of Manchester MA, Carolyn Los of Athens Greece, Win Nordblom of Ayer MA, Peter Nordblom of Cambridge MA and Lee Nordblom of Beverly MA and their spouses . He also leaves 19 grandchildren and 14 great-grandchildren as well as his sister June Robinson, her husband Dr. Jack Robinson and many nieces and nephews.
Gifts in his memory may be made to:
The Boys and Girls Club of Boston
115 Warren St.
Roxbury, MA 02119
The Museum of Science
1 Science Park
Boston MA 02114
Goodwin Procter’s Real Estate Capital Markets Conference was recently held in New York City in partnership with Columbia Business School. An exceptional group of speakers discussed the real estate markets, investments, and the economy.
The keynote presentation was delivered by Austan Goolsbee, former chairman of President Obama’s Council of Economic Advisers, and now a Professor of Economics at the University of Chicago’s Booth School of Business. Goolsbee spoke with “grim optimism” about the US economy. The US has the most productive work force in the world and low energy and new-energy sources will benefit our growth. Relative to the rest of the world, our fiscal imbalance is manageable. All in all, he believes that the next six to twelve months will be a bumpy ride, but prospects in the long-run look good.
The following are a few interesting observations made during the panel discussions:
- Demographics are playing a key role internationally, especially in the US. Effects of this will be seen in an increased demand for apartments, senior housing, and retail.
- With accounting standards likely to change in the future, as relating to corporate leasing and ownership, more businesses will likely choose owning large amounts of their space.
- Retail sales continue to be impacted by online competition, but retail is still a growing market. The future may move towards more hybrids that have both online and storefront locations.
- Office space needs are dropping in terms of space requirements per new job. However, there is a sense that over time businesses will start to swing back towards a need for greater space.
- Multifamily housing rents are back to pre-recession highs and it is likely that rents will experience slower growth going forward.
- Record amounts of capital were raised both in the public and private markets last year. With less growth worldwide, real estate is very attractive to investors. Investor interest is focused on yields and risk management. Where in the past, “cash is king”, now, “cash flow is king”.
- Rates should not be rising in the short term, but that is a big risk for all asset classes. The markets could wake up to a starting spike in rates that, in hindsight, will have seemed inevitable.