Cambridge Is a 5-Tool Town
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Some markets strive to be live/work/play. Cambridge aims for five prongs: live/work/play/study/innovate, assistant city manager Iram Farooq told the 300 guests at Bisnow’s Future of Cambridge event yesterday morning.
It’s the best of times for this city of 105,000, a global leader in life science. There’s 5.2M SF in the development pipeline; vacancy rates for labs are at or near zero; and office rents are approaching $100 SF gross. Big national players like Boston Properties consider it to be as good as a real estate market gets. Soon, the city will start working on its next master plan. As it considers the coming 30 years, the challenge is how to cultivate the positive trends and mitigate the negative ones, Iram says.
To consider what makes the city special and how to enhance it, Bisnow had on hand: Iram, Google Real Estate Project Executive John Moran, Michael Joroff, a longtime MIT affiliated research and project director focusing on the city-making industry, and the moderator, Unispace’s Matt Lock. Hallmarks of the city are its pursuit of diversity and equity among people and businesses, Iram says. It’s fortunate that many stakeholders are at the table and relations are positive, she says. The big issues are traffic, transportation and weather—the coastal location means dealing with climate change, storm surge and sea level rise.
Since the 1960s, Cambridge has seen neighborhoods like Kendall Square/East Cambridge, Alewife and North Point start transforming from industrial to STEM-centric innovation hotbeds. Key to the change are its universities—Harvard and MIT, generators that drive commercial innovation and help spawn companies that create cutting-edge jobs, says Michael. During this growth cycle, design may focus on Millennials and the burgeoning life science industry but buildings also must be created to be agile and flexible so they can change for the next generation of workers and the new industries that will emerge. Improving transportation means fixing the T now but it’s also about inventing a future system that’s better.
When Google was searching for space in the metro area, it was drawn to Kendall Square for its proximity to world-class institutions and companies, and access to the rest of the Boston area. Google creates exciting work environments, but, John says, also is engaged with the surrounding community and its amenities—culture, restaurants and cinema—that make Kendall Square a great place to work. To continue Kendall Square's evolution into a vibrant 24/7 community, Google will do its part by continuing to host events and participate in civic organizations that are shaping the neighborhood.
The other panel featured HYM Investments’ Tom O’Brien, Iram, King Street Properties Tom Ragno, Hanover’s David Hall and the moderator, Perkins+Will’s Bill Harris. David says that not long ago when he was searching for development sites, Alewife was a “sleepy” neighborhood. But since the city was planning for the development of 1,400 new apartments, and it has a Red Line stop, Hanover was confident enough in the future of Alewife to invest $310M to build a three-building complex with 865 apartments. The first, completed last year with 398 units, is 98% leased; construction just started on the second and Hanover recently closed on a third site where it expects to start construction on 254 apartments late next year. David’s team is now looking for another Cambridge site—perhaps in North Point or Kendall.
During the recession, HYM searched for “broken projects to fix,” and the 45-acre North Point site certainly qualified, Tom says. It had issues around permitting, environmental remediation and its location in an undiscovered market. But confident that the Green Line extension would give it a new T-stop and tight connection to Boston, Somerville and Medford, prospects looked good. With last spring’s completion and lease-up of HYM’s Twenty 20 apartment building and a new investment partner, Divco West, there’s a capital plan in place to build out the rest of the site, Tom tells us. Going forward, it’s important for Cambridge to cultivate life science but also other innovative industries by encouraging startups and small companies to put down stakes.
For King Street’s Tom Ragno, Alewife is a model value-add play. In summer 2014, nerves were a bit frayed at the thought of Pfizer leaving for Kendall and Vertex leaving the city altogether for the Boston Seaport District. But Tom’s team renovated Pfizer’s former buildings on Cambridgepark Drive, and they’re now 100% leased. Since the site is so close to Route 2 and on the Red Line T-stop, King Street tenants come from the suburbs and from Kendall. On leasing tours, Tom says that prospective tenants focus on all the housing being developed in walking distance and the retail that’s moving in to follow it. The opening of Bon Me Asian restaurant is a sure sign of the change.
For Iram and the city, the challenge is finding the right balance between development and placemaking, she says. Until 2001, much city zoning prohibited the mix of uses. But the zoning has been redrawn with neighborhoods like Alewife undergoing master planning processes that mix uses. She hopes that as more housing is built it will be a catalyst to attract more retail and other uses that will inject vitality well into the evening. This is city building.
Thank you to our terrific event sponsors: Unispace and Perkins+Will (principal Bill Harris networking, far right). No way could we do this without you.