How One Firm is Using Multifamily to Lure Office Deals
Even though Cabot Cabot & Forbes CEO Jay Doherty runs a 110-year-old real estate firm, he says he's got to be nimble and innovative to succeed. (If they were still doing everything the same as 1904, they'd need a stable instead of a parking lot at their office.) Hence his decision to diversify from office and tech to multifamily, like the Atmark project he just delivered on behalf of O'Connor Capital Partners in Alewife last week.
Still a techie at heart, Jay focuses on building these rental homes for the innovation economy and is planning for new office and R&D developments in these markets. The hope in Alewife: As office rents continue to rise in East Cambridge and the Seaport—and with 2,000 apartments in development in the West Cambridge neighborhood— innovation companies will look there as a good location for new office/flex space with a ready-made employment base among apartment tenants. CC&F is also developing 334 apartments in Newton and is building 180 apartments at a Quincy T-stop.
When Jay was a young man like CC&F senior project managers John Sullivan and Caleb Manchester (above), he was thinking of cable TV as a career path, not real estate. At Harvard Business School in 1981, he worked on a case for CC&F, then two weeks later, he got a call from the venerable firm offering him a job. He started as a project manager and in ’89, took over the New England region and the care of trophy assets like 60 State St. But soon the market tanked, and Jay became part of a small management team stabilizing and rebuilding CC&F. In ’04, he bought the company and in the last few years, diversified into multifamily.
Throughout the region, multifamily construction has outpaced office development, but Jay forecasts that more work space may be on the way. Alewife office rents rose in the past 18 months from $28/SF to over $40/SF, and the city of Cambridge is considering more infrastructure improvements. Quincy (above) is a more adventurous location. Despite its Red Line access, CC&F and Boston Andes had to make a persistent effort to capitalize the project, and it’s now the first major development to break ground in the South Shore city during the recovery. To CC&F, it has a winning formula: Inside Rt 128, on the Red Line, a lack of new product, and Mayor Koch’s welcoming administration.
Jay is a forceful advocate for improving Boston's transportation infrastructure. His projects are at T-stops, or like the one under development in Newton’s Welles Office Park (above), have a shuttle to the nearest transit line. Jay comes by this concern naturally. A Brookline native, his neighbor, state rep Mike Dukakis, enlisted Jay in his first campaign for governor in 1975. After campaigning with Dukakis and serving in his first administration, Jay saw the link between infrastructure, job growth, and property development. Among his standout projects: In the '80s, he leased 55 Cambridgepark Dr in then-sleepy East Cambridge to an then-unknown company, Lotus Development, which stayed on for 20 years.