WS Development’s record $359M land acquisition of 12.5 acres in Seaport Square from Morgan Stanley and partner BGI made headlines last week. While it seemed to come out of the blue, it was a long time in the making, WS EVP Dick Marks tells Bisnow.
The Chestnut Hill-based developer has been involved with Seaport Square—Morgan Stanley and BGI’s 6.3M SF mixed-use development site—since 2006, Dick says. More than a year ago, WS started talking to the Seaport Square partners about buying the land they hadn't yet sold, Dick recalls. Timing was right for Morgan Stanley. It had acquired the waterfront land with capital from a fund whose life was expiring. The big global investment bank was ready to sell, Dick says.
Developing at the waterfront is no simple matter. Now that WS owns 3.3M SF, there are issues concerning: the environment, public sector interests, and several other developers that are doing projects at Seaport Square and elsewhere around the harbor. But WS has deep knowledge of the site, the city and the region. For years, it’s been committed to developing 1.3M SF of retail at Seaport Square. Some of that space is on the ground or second floor of buildings being constructed by other companies. WS’s acquisition gives it control over everything built on 10 city blocks. It’s a chance to create a neighborhood within a neighborhood: offices, housing, hotels, retail and public spaces, Dick says.
Booking a big sale like this was, no doubt, good news for Morgan Stanley after reporting some tough Q3 financial results. Closing a purchase that makes WS the owner of one of the most high-profile development tracts in North America is a milestone for the local company. It’s one of the largest, privately owned retail developers in the country, with a track record of being a long-term owner/operator of almost everything it has developed. “We’re not a merchant builder” that completes a project then quickly turns around to sell, Dick says.
WS develops, owns, manages and leases 88 properties—20M SF, most on the East Coast (including Market Street, Lynnfield, above)—and has 4M SF under development (not counting the new acquisition). The land it just purchased at the Seaport has been master planned and approved for 2.8M SF of development, including an additional 500k SF of retail. What’s built there might knit together Fort Point Channel, the waterfront, the convention center and the financial district. And how it’s programmed and operated is critical. WS plans to fill the district with art, music and events designed to enrich life in the city. It’s also an opportunity for WS to weigh in on transportation improvements, especially the planned reopening of the Northern Avenue Bridge. Dick says the company feels a “great duty to do right by the city.” BGI will continue to have an active role in the project as an adviser and in building the streets, parks, a chapel and an office building for itself.
