Stairwell from above / all photos by Alison Kidder
by Lauren Nowicki
Once built for bright economic drivers such as Digital Equipment Corporation, Wang Laboratories, and Apollo Computer, the Route 128 and 495 corridors are canvassed with two-story office buildings from the 1980s boom that are now considered obsolete. Yet current commercial real estate trends present an opportunity for reconsideration and reuse. With Boston’s class A vacancy rates at 9.1%, coveted Cambridge laboratory space at 1.5%, and highly competitive coworking units comprising only 2.4% of inventory, the city remains an option for a select few newcomers.1 Cultural demographics — exerted by the Millennials — impart a determining influence on companies today.
Comprising the largest workforce population at 35%, design and a well-placed office are a critical tool in recruitment.2 Whereas employees 30 years ago adapted to their environment, today’s office environments acclimate to employees. Elements of workplace density, parking, infrastructure, amenities, and commute time are now inherent factors in leasing and purchasing decisions.
Can empty and underutilized properties in Boston’s suburbs be redesigned and engineered for profitability within this burgeoning real estate market? This proposition will be explored at the ABX seminar titled Repositioning of Suburban Two-Story Office and R&D Buildings on Nov. 28 at 1:30 p.m. Featuring speakers Greg Klemmer, VP Colliers International; Shawn Hawthorne, director of asset management, Novaya Real Estate Ventures; Chuck Reilly, VP business development; and Dennis McCarthy, VP design/ architecture at Dacon Corporation, the issue will be examined from broker, developer, builder, and architectural positions. Commonality issues of renovation, design, subdivision, and-acquisition challenges will be discussed.
“Many parties align for a successful real estate venture, each carrying expertise and influence. This discussion will enable attendees a comprehensive market viewpoint,” states Chuck Reilly. “With vacancies historically low, high rent rates, and full employment, capacity is the key issue — both in availability of human capital and office space. Companies today are forced to consider long term implications upfront as Boston commerce outgrows the city footprint.”
Exterior of 54 Middlesex Turnpike
With a metro population of 4.6 million, Boston ranks 10th in U.S. metro areas, with 80% of Mass. residents living in or around the city.3 Its roadways, subways, regional rail, air, and sea options make Mass. an amenable state to do business in. Life sciences, high-tech, and the start-up ecosystem propelled Boston past New York City in 2018 venture funding rankings. These economic trends are permanently reconfiguring Boston’s commercial landscape.
“With funding flowing to start-ups, high-techn and life sciences industries will continue to excel. Growing suburban clusters are a necessity and often the only option for these companies to grow. The transformation of older buildings to meet the needs of flex, technology, and life sciences companies solves the issues of lower costs, good infrastructure, and young Millennial families seeking work/life balance,” states Greg Klemmer.
Careful assessment of structures from the 1980s can yield hidden opportunity. “From an investment standpoint, rehabilitation of these buildings can be part of a successful investment strategy when evaluated from the perspective of where future business is building. We see mixed-use properties addressing the influx as metro Boston’s landscape transitions in a thriving economy. This is where entrepreneurial minds win best,” agrees Novaya’s Shawn Hawthorne.
Curtainwall
Another vanguard in building work environments is design. For many of these buildings, ADA compliance, environmental conservation, adequate power, finished ceiling heights, loading capabilities, and parking were nascent considerations. Ultimately, the viability of a property rests on employee productivity, which today is characterized by multiple elements.
“A work environment should embody the company’s brand. Acoustic controls, casual locations for individual work, wellness facilities, collaborative areas, biophilic design, environmental integration, creative spaces — today’s office environment is expected to be fluid and agile. These concepts were not implemented by developers 30 years ago and as such require significant changes in form and function,” cites Dennis McCarthy. “Building materials selection as well as systems technology play a large role in implementing design concepts. Variable flow refrigerant systems, extensive flexibility of LED lighting, and the cultural embrace of a relaxed industrial aesthetic help transform antiquated buildings into successful work environments.”
The merits of metro Boston’s 30-year-old properties require assessment from multiple viewpoints. Renovation expenses, ability to subdivide, acquisition costs, and design challenges must be assessed from a holistic viewpoint. Using a versatile approach, consideration of aesthetic, functional, and long-term viability will result in productive choices and the possibility of a building whose longevity through reuse is assured.
1 Aaron Jodka, Greater Boston Market Viewpoint Q2 and Q3 2018, Colliers (https://www2.colliers.com/en/United-States/Cities/Boston).
2 Richard Fry, Millennials are the Largest Generation in the US Labor Force, Pew Research Center, April 11, 20118 (http://www.pewresearch.org/fact-tank/2018/04/11/millennials-largest-generation-us-labor-force/).
3 Wikipedia, Greater Boston (https://en.wikipedia.org/wiki/Greater_Boston).
