Westwood Station: A New Name, a New Team, and a Different Time

The transformation begins.  Westwood Station at University Avenue on Route 128 will now be known as University Station.  A new team, led by New England Development along with Eastern Real Estate, National Development/Charles River Realty Investors, and Clarion Partners recently purchased the 135- acre prime development site. The first phase of the new University Station is expected to open in 2014.  The project had been on hold since the market crashed and the previous development team of CC&F/ Commonfund sold the property in 2010 after its lender, Anglo Irish Bank, went bankrupt and was acquired by the Irish government.

While this latest announcement is exciting for the region, credit is due to CC&F for amassing such a large tract of land with direct access to Route 128 and a major transit station and permitting a 4 million square foot, mixed-use, transit-oriented, energy efficient master plan.  With an improving economy, the time is right for this landmark project to move forward.

So, what has changed beside the name?

  • The project will remain a mixed-use project comprised of retail, housing, office and hotel uses.  The market, however, has clearly changed and appears ready for multi-family rental housing and a retail center. It will remain to be seen how much of the development will be office and hotel and when that could happen.
  • A supermarket is almost certain to occupy space here.  Again, this is not a change in plans, especially with Wegmans expected to be the designee for this location.  It will not be surprising if other local grocery store chains continue to oppose such a proposal.
  • The state will continue to invest in the highway infrastructure improvements in and around the University Avenue/Route 128 intersection.
  • The project will be a multi-modal transit oriented development, taking advantage of the Amtrak/MBTA Commuter Rail station and Interstate Route 95 and State Route 128.  Before Westwood Station’s plans, the density of development at this location was one of the lowest of any intersection along Route 128, underutilizing the excellent transit opportunities.
  • Although, probably too early to have financing in place, the debt market is sure to be open to investments such as this.  Now is a very different economy from the late 2008 economic disaster that began with sub-prime home loans, led to debt swap defaults, and ended in the near collapse of the financial markets.

With the development team set, a strong financing market in place, a growing demand for retail and residential space, and a prime location for corporate build-to-suit office sites, University Station should be the first mega-project to break ground within the next 12 months. Congratulations and best of luck to all involved!

Development Opportunities May Arise Out of Anglo Irish Sale

As I discussed in today’s Boston Herald, the announcement of the sale of Anglo Irish Bank’s portfolio to Lone Star Funds, JP Morgan Chase and Wells Fargo, means that some of the Boston market’s premier development projects will be changing hands.  Although the bulk of the performing loans will be acquired by the two traditional banking companies, much of the action will come from Lone Star’s share of the nonperforming loans.

Anglo Irish was the go to bank for much of the development action over the past decade.  It provided funding to the region’s top developers for some of the best located projects.  Unfortunately, the 2008 downturn and the continuing recession put a chill on all speculative developments across the country.

The big question is who will get the rights to start these developments when the market begins to improve?  Will it be the existing borrower negotiating a deal to stay with the project or will it be a new player?  It seems clear that Westwood Station will be the latter with a transfer that came close before the whole portfolio was put on the market.

The Greater Boston market has not recovered, but there are pockets of demand that will justify some new development occurring over the next 12-24 months and it is very likely that some of that product will come from this newly sold portfolio.