January 14, 2015

What The Olympics Mean
For Boston Real Estate

Sure, we're a sports crazy town. But that doesn't mean the Boston 2024 bandwagon doesn't include some people who care more about JVs than javelins. And with good reason: landing those Olympics could be another boost to sustain our hot commercial real estate market.

John Fish, CEO of Suffolk Construction, the region's largest builder (working on the $650M Millennium Tower), is leading the private campaign to host the games as president of Boston 2024. He's long believed in the power of sport.  A signature Suffolk community program, Boston Scholar Athletes, uses participation in organized sports to motivate youngsters to perform well in school. After the 2013 Marathon bombings, John helped set up One Fund Boston, which raised nearly $61M. Hardly parochial, John has grown Suffolk into a national player, with projects from the Northeast to the West Coast and down to the Gulf of Mexico.

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Now, John hopes The Hub will host its first Olympics, which he estimates can be done for $4.5B, well below the $51B spent for the 2014 Winter Games in Sochi. That pleases the IOC, eager to cut back on the exorbitant price tag. The idea is to use mostly existing facilities—college stadiums, dorms and the Charles River—and the T for transportation. If Boston does get the nod, it's likely to deliver great opportunities to local design, engineering and planning companies, speculates ADD/Stantec VP for US commercial development Fred Kramer.

Most challenging will be rebuilding parts of the T, an effort discussed for the past 20 years. Recently, Boston has emerged as world class in attracting companies to our urban core and to our life science, education and tech institutions. To maintain that cachet, modern mass transit is a must, says CC&F CEO Jay Doherty (right, with project manager Caleb Manchester). Some MBTA equipment is so old, companies no longer make the parts; the T fabricates them itself. It needs new rolling stock, roadbeds, signals and garages to replace those like the one in Quincy that's been condemned

If the Olympics could give some oomph to that effort, it would be a big plus because it's about more than money. For instance, revamping South Station means building consensus among the MBTA, the city, the state and the US post office, which has an adjacent facility, says McCall & Almy president Bill McCall. There are a lot of “frogs to fit on that log.” (Could frog logging become a new Olympic sport?) Bill says the games could require construction of some housing, and a few temporary and permanent sports venues. But Bill, as bearish as they come, says it's hard to imagine the region getting any hotter. “It's on fire,” he says. 

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Activity in one market sparks action in another. General Dynamics Mission Systems' recent $54M sale of land in Needham to Normandy meant the company needed to find new space and move. Yesterday, The Davis Co announced that it was the fortunate beneficiary. General Dynamics leased 131k SF at 100 Rustcraft Rd in nearby Dedham. TDC purchased the building in 2012, when it suffered from deferred maintenance and a 45% vacancy, TDC CEO Jon Davis tells us. He's investing in a major overhaul and says the building has its charms: a convenient location near new multifamily, office and retail projects; a commuter rail station; highways; and most alluring, it had a big block of light industrial/office space inside Rt 128. The building is now 91% occupied.

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Where's the Multifamily Slowdown? Not Here!

Bisnow is excited to bring our Boston Multifamily event to town on Thursday at the Sheraton Boston, 7:30am. The market is still so strong, it almost seems self-propelled. ADD/Stantec principal James Gray, a panelist, says his design firm has been searching for signs of the next dip without success. Even the escalating values downtown have an upside—more projects in the neighborhoods. James and his team are designing a new multifamily building for Federal Realty at Assembly Row in Somerville; a 134-unit building in Brighton for Urban Spaces; and they're working on The Merc in Waltham for Northland.

The close-in ‘burbs are where IBEW Local 103 is finding opportunities to show how they're more competitive on price and productivity than ever, says director of business development Matt Lash. These licensed electrical workers are among the very few union mechanical craftspeople working at Avalon Assembly Row; they worked on Redgate's Maxwell's Green and expect to be on the job building affordable housing in Union Square like Cathartes' 197 Washington St development (all Somerville projects). Local 103 also creates entry-level jobs for residents in communities where it's working, Matt tells us. Get all the details at Bisnow's Boston Multifamily, Thursday, Jan. 15, Sheraton Boston, 7:30am. Register.

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