Why Manhattan Should Be Boston's Model, Not Its Rival
Put the rivalry to bed: with 250 tenants looking for a combined 4M SF of office space in greater Boston, experts say Beantown should try to emulate Manhattan's construction wave, not try to distance itself from its Northeast neighbor.
“In my 40-plus years, I’ve never seen [the New York] market so healthy and stable before,” Arthur Mirante, Avison Young principal and New York Tri-State office president, said at the company’s “Boston Market Trends & Outlook” breakfast Wednesday morning.
Mirante said the Big Apple has a supply of office space for any enterprise, from WeWorks to trophy properties asking $200 and higher per square foot. Hudson Yards is of particular importance, as it has a parallel evolution to that of Boston’s Seaport neighborhood. The key to the 50M SF mixed-use development's success has been the city and state aggressively committing to making it work, Mirante said.
“Three years ago, this was the frontier, so you might wonder why all these companies decided to move there,” Mirante said. “It was infrastructure first, then residential and then office. That was the strategy and what has proven to be the reality.”
The Seaport has similarly catapulted into a construction hotbed from the expanse of parking lots seen during the initial reconnecting with Boston once the Central Artery came down. While the MBTA Silver Line tunnels were built with the Big Dig and provided the neighborhood with transit, there was not much in the area apart from the Boston Convention and Exhibition Center.
Today, it is attracting a diverse portfolio of tenants similar to Hudson Yards. The Goodwin law firm, Boston Consulting Group, Reebok and GE are relocating into the neighborhood, and more are looking to join.
“What’s happening in New York is very similar to what’s happening here, it’s just that NY is a much bigger market,” Avison Young Boston principal Ron Perry said. “Manhattan has 400M+ SF [of office space], and when we talk about our Boston market, which we think is very large, it’s just under 70M SF.”
The average age of New York’s building stock is 50 to 60 years old, and the market has responded with new office product, Mirante said. Law firms drawn to Hudson Yards wind up paying less per attorney because the new towers are more efficient than Class-B or even commodity Class-A buildings. Developers in Boston are hoping the same realization comes to active tenants here.
“Tenants want to occupy these nicer spaces to help them recruit and retain talent,” Mirante said.
Be it Atlantic Wharf, Kendall Square or the Prudential Center, Boston Properties has a hand in Boston’s most popular office developments. It embodied Mirante’s push for efficiency when it took a stance and set out to create the most sustainable office building in Boston, according to Bryan Koop, Boston Properties' Boston region executive vice president.
The 17-story 888 Boylston may see its most foot traffic in the Italian emporium Eataly occupying its lower floors, but it has drawn tenants like Natixis Global Asset Management upstairs with its design. Developers obsessed over creating large, column-free floor plates and getting more natural light to the core of the building in executing their ultra-sustainable vision. Experts say companies take note of such things when making a decision to move.
“The industry would describe this as a Class-B product," Koop said. "Well I would tell you this building isn’t even in a class and that it’s the iPhone of buildings."