The Economics of Building in Boston, Part 2 [Archive]

Lurker

05-18-2007, 11:59 AM

Remember that China/Thailand/Malaysia/ect. right now is manufacturing stuff for American companies who then sell that product back to the US and the rest of the world. All the major capital is being made the by US companies, but Asia in turn receives investment in payment for the manufacturing (infrastructure & the fact otherwise poor farmers now have some disposable income).

In a few years, all those factory workers will have enough money to demand goods and services (look at every industrialized country 10-20 years into industrialization) and as a result Asian countries will develop a significant consumer market. The companies that form to serve that market will start putting orders into their own manufacturers causing manufacturing demand to go up. This will drive wages up over the limited supply of workers as well as due to the usual formation of labor movements and governments regulating safety/work rules.
All of a sudden there is no more cheap labor and US companies will have to either move the manufacturing elsewhere or pay more money.

Depending on the cost jobs will either move back to the US (happens first with higher tech or quality controlled stuff), or move to whatever poor undeveloped country is willing to work in exchange for investment (by the end of the next century every country that isn't a political basket case probably won't be poor anymore at the current rate of development).
Be really worried when Asian manufacturers make stuff for Asian companies than then sell products to the the US and abroad.

Back to Architecture.......
What is killing development domestically right now is the cost of steel, gas, and other materials which are being gobbled up at an astronomical rate by developing countries while production has remained stable. Asia is building its own steel mills, refineries, kilns, cement works, etc. right now to lower their costs and increase supplies, while domestically NIMBYS and environment regulation are hamstringing us.

Cheap labor domestically is realistically not going to happen anymore, so we need cheaper materials. Everyone hates the really cheap materials, so our only options are to either start rebuilding a nifty Japanese style automated industrial base while telling NIMBYs to go piss off, or drastically alter the construction industry (build buildings like ships, planes & cars in factory fabricated sections rather than the current practice of on site assembly), which is going to require a reorganization and retooling effort equivalent to rebuilding or industrial base. Either will suffice, but I'd rather do both and have dirt cheap buildings, built in exacting factory controlled environments, that as assembled super fast thanks to their component assemblies.

Mmmm lunch

briv

05-18-2007, 03:03 PM

Cheap labor domestically is realistically not going to happen anymore, so we need cheaper materials. Everyone hates the really cheap materials, so our only options are to either start rebuilding a nifty Japanese style automated industrial base while telling NIMBYs to go piss off, or drastically alter the construction industry (build buildings like ships, planes & cars in factory fabricated sections rather than the current practice of on site assembly), which is going to require a reorganization and retooling effort equivalent to rebuilding or industrial base. Either will suffice, but I'd rather do both and have dirt cheap buildings, built in exacting factory controlled environments, that as assembled super fast thanks to their component assemblies.

Mmmm lunch

Cheap labor? How about removing labor altogether? Take a look at the future: http://www.contourcrafting.org/

singbat

05-18-2007, 06:34 PM

I know this is off topic...but I think Bobby Digital's comment about the economics of development is really important and interesting. It's widely known that our low interest rates- which is enabled by massive Asian investment in US treasuries- has been the driving force behind the real estate boom of the past decade.

i'm not an economist (actually a trained political economist -- which is like a trained seal, only different), but you are forgetting at least two things:

- the recent fear of deflation
- standard monetary policy counter balancing the business cycle

the asians' do hold a lot of treasury instruments, but nothing like as much as most people assume when you look at the whole. you're not wrong on that point, but there is often an order of magnitude on the loose in the discussion...

there's more interesting stuff down there in dem weeds, but it isn't very closely related to building...

the recent fear of deflation? I thought stagflation was more a concern at this point - high inflation with low economic growth. Deflation is usually a concern during recession, and we are not at the cusp of recession.

Liquidity in the market has been a major diver for low interest rates, and the prolonged credit cycle. Foreign investors have been seeking yield where-ever they can get it to support their currencies. The real problem will occur when the Yuan is devalued to where it should be.

Yuan won't be devalued -- though I think i get your point there.

the fear of deflation was maybe 2003 - 2005. i'd have to look in the back issues to get a real fix on it -- but it was a big topic and for good reason.

stagflation is more current potential issue, i agree.

singbat

05-18-2007, 06:57 PM

All the major capital is being made the by US companies, but Asia in turn receives investment in payment for the manufacturing (infrastructure & the fact otherwise poor farmers now have some disposable income).

This isn't quite accurate. for one thing value added accrues disproportionately to the the asian producers due to the long tail behind the item showing up in Best Buy.

In a few years, all those factory workers will have enough money to demand goods and services (look at every industrialized country 10-20 years into industrialization) and as a result Asian countries will develop a significant consumer market.

in every first generation tiger economy this has already happened. in China's coast this began happening more than 10 years ago. China's middle class followed the second generation tigers (e.g. Thailand). Vietnam, Cambodia, rural China, rural India, etc. are next up.

The companies that form to serve that market will start putting orders into their own manufacturers causing manufacturing demand to go up. This will drive wages up over the limited supply of workers as well as due to the usual formation of labor movements and governments regulating safety/work rules.
All of a sudden there is no more cheap labor and US companies will have to either move the manufacturing elsewhere or pay more money.

yes and no. for one thing, mainland China and India have enormous reserves of under used people. production only moves slowly west and north, respectively.

Depending on the cost jobs will either move back to the US (happens first with higher tech or quality controlled stuff),

by and large, incorrect. technology follows manufacturing. the jobs will not return en mass unless there is a fundamental and rapidly obtaining shift in valuations. and then only if the US is the best positioned workforce to fill the need, which is unlikely since in many industries we have not been filling any similar need at scale for decades.

or move to whatever poor undeveloped country is willing to work in exchange for investment (by the end of the next century every country that isn't a political basket case probably won't be poor anymore at the current rate of development).

very big statement. you're assuming no external political, technical, environmental, and resource factors. i.e. never happens that way.

Be really worried when Asian manufacturers make stuff for Asian companies than then sell products to the the US and abroad.

this concern is not sustained by the example of the Japan and the original tiger economies -- they were export led and had an enormous impact while being outward focused per dirigiste policies.

moreover, as i said, technology (and design, logistics, etc.) follows production. it doesn't matter who owns the label in the long term. all production is effectively investment in more than just plant and equipment. it is perforce infrastructure, human capital, capital management skills formation and other services development, etc.

Back to Architecture.......

good idea... :-)

Cheap labor domestically is realistically not going to happen anymore
not necessarily true. cheap is relative, depends on currency (monetary and fiscal policy, balance of payments, etc.), productivity, opportunity cost, etc., etc...

wish i had as much to say about architecture...

Lurker

05-18-2007, 07:29 PM

Interesting and aptly stated Singbat, I'll admit to being bested as economics are outside of my fields of expertise.

Bobby Digital

05-19-2007, 06:42 AM

Labor isn't gonna 'cheap' in this country ever again... gimmie a break.

unless the entire country turns into mexicans. singbat, you list all these 'possibilities' that dont really have a bearing on labor realistically. how about labor unions, specialization, education. labor isn't going to be cheap here anytime soon. That and we basically steal alot of the best foreign minds because they come to school here and earn better wages when they're out of college.

and production does move to cheaper countries, despite what the current countries try to do to hinder that. stuff that was getting built in China is now getting built in vietnam. You even pointed this out yourself.

Singbat... you know how buildings get demolished in china? they put up bambo scaffolding, have hundreds of guys bang away at the building until its rubble and then haul it away. Now tell me when we are going to have 'relatively' cheaper labor. aint gonna happen. not in our lifetimes.

atlantaden

05-19-2007, 08:08 AM

Morning guys, I think it's time to make a new thread for this topic so the discussion can get back to the Mandarin Oriental. Thanks.

singbat

05-19-2007, 01:27 PM

I wasn't going to continue the economics aspect to this thread. but then i thought: the guy building a 5-star hotel in the middle of boston using blue collar labor to be staffed and/or serviced, in part, by "lower class" service workers was the one who started it. (and the recent posts on the ICA thread make me think i can get away with anything... :-)

Van, feel free to move us if you think its gone too far...

Labor isn't gonna 'cheap' in this country ever again... gimmie a break.

you may be correct. however, national economies not only rise and fall, they are also in motion relative to their peers.

look at the arc of the Argentine economy. once one of the most solidly middle class and generally wealthy countries saw their economy crash pretty significantly in recent years -- after a long period of stagnation that degraded their position.

look at the arc of the UK they've gone up, way up, and way down, and back to the upper middle. My grandfather owned a factory in the UK. his son exported himself to get a better job. I'm considering importing myself to get better healthcare and a second eduction.

look at Germany's fall, rise, fall, rise, fall, and rise... look at the pain Russia experienced post comunism. look at the rise and fall of the cubian economy. where is the Roman republic/empire? why did Ming China collapse? what on earth would make us think that the US has repealed the march of history?

unless the entire country turns into mexicans.

perhaps we could turn into North Dakota, Montana, Lowell, Iowa, Vermont, Springfield, Maine, Detroit, etc. instead? Or perhaps the Mexicans will continue becoming more like Texans.

singbat, you list all these 'possibilities' that dont really have a bearing on labor realistically. how about labor unions, specialization, education. labor isn't going to be cheap here anytime soon.

i would argue that macro has THE impact on micro.

That and we basically steal alot of the best foreign minds because they come to school here and earn better wages when they're out of college.

the literature and common sense suggests this is a declining trend. i wish it were not so, but when the first language of the industrialized world is suddenly inundated with 1.5 billion people who's first common language is not english, and who seek to emulate economies (Singapore, Taiwan, Hong Kong) that speak their common language before the world's common language, something will change. and don't forget that there was a time when US scientists learned Germain so that they could participate in the cutting edge research community.

and production does move to cheaper countries, despite what the current countries try to do to hinder that. stuff that was getting built in China is now getting built in vietnam. You even pointed this out yourself.

absolutely. but when production moves from Hangzhou to Xian or Saigon following wages, Hangzhou is left with a much higher technical base. and production doesn't simply flow on, it is pushed by new production coming in. i.e. when the Hangzhou television manufacturer pushes its tube production out to the west, in comes the cell phone manufacturer with its home grown line of phones based on its learning as a partner of Motorola in the 90s. i'm not making this up.

and domestic firms source from domestic firms where possible because there is lower transactional friction, including easier information and closer to just in time logistics -- that's how the highly robust small-producer Taiwan economy boot strapped itself off a small number of early inbound ventures mainly from the US and Japan.

as we push IC fab to Taiwan, South Korea and Singapore we see Hong Kong, Taiwan, Singapore and South Korea begin to pick up IC design skills. when we push IC design out, we replace it with what? Apple's designers? that works for Apple, but it doesn't do anything for Dell... meanwhile we make good bank on IC production and test equipment, but what makes us think that aspect of the business will stay domestic when most of the worlds chips are made on the other side of the pacific?

Singbat... you know how buildings get demolished in china? they put up bambo scaffolding, have hundreds of guys bang away at the building until its rubble and then haul it away.

i lived in Hangzhou in 91 and 92. the city's gross city product expanded 25% in 91. my apartment complex was next door to a large 2-story structure that was hammered down just as you describe, while the rest of the "Science and Technology District" was build from whole cloth out of rice paddies. I'm very very aware.

On the other hand, I lived in Taiwan two years earlier where at that time a majority of the value added of many of our laptops was being created and, you know what, they had the same building techniques. despite having a standard of living that was then roughly par with Spain and Greece. a couple years before that, I lived in Spain. They didn't knock buildings down that way because at that time they weren't doing a lot of building. And they weren't making laptops or running IC fabs.

Now tell me when we are going to have 'relatively' cheaper labor. aint gonna happen. not in our lifetimes.

If your currency crashes you will find yourself in the company of Anything for a Buck, Inc. it could happen. I hope it doesn't.

statler

09-04-2007, 02:50 PM

Agency Issues 40B Monitoring Guidelines
By Aglaia Pikounis
Reporter

An agency that finances and monitors housing developments under the state?s controversial comprehensive permitting law has released new guidelines that aim to address concerns about developers underreporting profits and overstating costs.

The state Department of Housing and Community Development is urging other agencies to follow the new auditing guidelines.

Some say the new guidelines, which were released by the quasi-public agency MassHousing, are an improvement but local officials still have concerns about whether they will curb developer abuses.

?It?s an improvement on existing guidelines but municipalities remain skeptical as to whether they will make a difference,? said Daniel C. Hill, a Cambridge attorney who represents towns that are trying to recover funds from Chapter 40B developers.

The changes come after critics of the law and the state?s inspector general have found that developers who receive comprehensive permits under the state?s Chapter 40B statute are taking advantage of a weak oversight system, inflating costs and hiding profits that should be returned to cities and towns for affordable housing. They contend monitoring of Chapter 40B projects was sloppy and failed to detect significant errors in audits.

The new cost certification manual for Chapter 40B homeownership projects was released by MassHousing in early August after the agency gathered public input from various sources for more than a year.

Chapter 40B enables developers to go through a community?s zoning board for a permit and avoid certain other local approvals in communities where less than 10 percent of the housing is affordable. In exchange, developers must agree to set aside at least 20 percent of the units they?re building for low- to moderate-income households. Developers with Chapter 40B permits that build homeownership units and subsidizing agencies sign regulatory agreements that include a 20 percent profit limitation.

Municipal officials in Massachusetts have complained that some Chapter 40B developers overstate costs, such as how much they paid for land. There also are concerns about how much developers are paying related entities that are doing work on the project, such as construction.

When developers report land costs, they must use the appraised value of land before it?s permitted, according to guidelines released by the Massachusetts Housing Partnership in November 2005. According to those guidelines, developers must limit related-party expenses to 14 percent of total costs. Related-party expenses refer to costs or charges billed by an entity connected or related to the developer, such as a contractor. Those standards still exist and the MassHousing cost-certification manual doesn?t change them.

Inspector General Gregory Sullivan launched an investigation of Chapter 40B projects last year.

In a letter sent to MassHousing Director Thomas Gleason last September, Sullivan reported some of the early findings that some developers ?apparently concealed profits by artificially inflating the costs of services performed by related parties, understating income by transferring property to related parties at discounts, and engaging in other accounting fictions.?

The inspector general?s office wants the state to establish a uniform set of rules to be followed by all agencies.

?This office would prefer that DHCD promulgate regulations to handle these matters rather than leaving it up to the subsidizing agency,? Jack McCarthy, senior assistant to Sullivan, told Banker & Tradesman. ?That way you would have one set of rules to follow rather than individual subsidizing agencies coming up with their own policies.?

He added, ?Regulations would have the force of law whereas policies do not.?

In response, DHCD spokesman Phil Hailer said the agency is ?currently reviewing proposed regulatory changes to Chapter 40B, including cost-certification procedures.?

?The agency hopes to hold public hearings regarding these changes by year's end with the goal of promulgating the new regulations sometime within the first quarter of 2008,? he added.

MassHousing?s new manual provides a detailed step-by-step format for developers and accountants submitting audits to follow, explained MassHousing spokesman Tom Farmer. The developers and accountants are required to present a very detailed breakdown of costs, he said.

?Basically, the goal was to get the accountants to submit to us a higher quality work product,? said Farmer.

Farmer said the new manual enables MassHousing to conduct ?test samples? to check if land acquisition, site preparation, building materials costs and other expenses are accurately reported.

Under the new guidelines, after an audit of a project is completed by the developer?s accountant, an accountant at MassHousing who is skilled in the construction industry reviews it, Farmer said. The audit then is sent to the town where the Chapter 40B development is located so officials can provide feedback.

But MassHousing still retains the final say on the audit. ?The final decision is going to rest with us. It?s not like we?re giving them [the municipalities] veto power,? explained Farmer.

Inherent ?Incompatibility?

Some observers say while it?s good that MassHousing will seek feedback from towns and cities, a subsidizing agency like MassHousing shouldn?t be checking on the profitability of projects.

?Inherently, in my mind, there?s incompatibility of asking subsidizing agencies to enforce profit restrictions when the agency has an interest in the profitability,? said Hill, an attorney with Anderson & Kreiger in Cambridge.

David J. Hedison, executive director of the Chelmsford Housing Authority, said the entity that provides financing should not conduct or oversee the auditing.

?It should be an unrelated entity,? Hedison said in an e-mail to Banker & Tradesman ?Historically, MassHousing has not identified a project that has excess profits.?

Hill said questions have also arisen over whether the level of review will be rigorous enough. The MassHousing manual relies on a specific set of accounting standards that are not the same as government auditing standards, explained Hill.

?Is it a rigorous enough standard to uncover the types of fraud and misrepresentation that the inspector general has uncovered through his auditing process?? asked Hill.

However, others insist that the guidelines do address critical issues about what developers are allowed to report as costs.

?It?s the first time where the state has issued specific instructions and guidance for developers, accounting firms and municipalities regarding the cost-certification audits in homeownership development,? said Aaorn Gornstein, executive director of the Citizens? Housing and Planning Association, a nonprofit organization that used to review audits of Chapter 40B projects.

Jay Talerman, an attorney who represents towns on Chapter 40B matters, said cost-certification audit issues must be resolved. He said the fact that MassHousing is seeking the community?s input on the audits is ?a step in the right direction.?

?The problems with cost certification are manifold. While involving municipalities is one key component of it, the bigger concern raised by municipalities as well as the inspector general revolves around the method in which profit is calculated.?

He added, ?What?s important ultimately is that we bridge the differences so that we can concentrate on housing. The cost-certification issues have become a sideshow that is dragging down good development along with the bad development. We won?t be able to accomplish good development until we solve these peripheral issues.?

No link available

whighlander

09-07-2007, 08:34 AM

About one hundred fifty years ago ?modern cities? were created to supply vast amounts of labor to the great manufacturing empires that had been unleashed by the Industrial Revolution

Later in the mid Twentieth Century cities offered large concentrations of office workers needed to provide the back-office underpinnings that were financing, insuring and litigating for the manufacturing that was becoming located elsewhere -- e.g. New York in the 1950's, Boston in the 1980's, London in the 1990's

Today or it will soon to be ? that we won't need that kind of concentrated labor here, in Lowell {purpose built for mill labor}, London, or Shanghai China

The next generation of robots and the automation of all manner of tasks from making chips to making financial transactions is on the near horizon. Design and high level management and research and development will still need some concentrations of the ?best and the brightest? ? but the rest can be done anywhere

So why do we need cities -- we go back to the Medieval Europe model -- cities housed Cathedrals, Universities and Fairs

Today we might revamp this ordering {and slightly change the terminology} to: Universities, Culture {including concert halls and art museums to supplement or supplant the cathedrals} and Conferences {including Trade Shows and Tourism to replace the Fairs} -- but otherwise the model is intact

So why is Boston still here and why does it need new buildings

Boston {the area} seems to have attracted a uniquely concentrated cluster of brainpower {the best and the brightest} in science {Nobel Prize Capital of the World}, medicine, finance and some important technologies

We need buildings to house the ?best and the brightest? students, professors and the alumni? all of whom can be counted on to create a bright and prosperous future if we give them a chance ? and don?t stand in their way too much and allow them to flourish along with their corporate creations

Is it permanent -- no -- eventually a km of ice will sit on top of where the Pru now sprouts --- just as it has in the past

But, for the next few generations ? Boston can and should be the economic envy of the rest of the world ? the rest will just be pretenders to the throne ? after all modern technical innovation was born here! ? and excepting the NIMBYs ? it still flourishes!

Westy

statler

09-20-2007, 07:27 AM

A man who can 'get things done'
Boston's mayor turns to a seasoned development professional with a 3-city resume to run BRA

By Thomas C. Palmer Jr., Globe Staff | September 20, 2007

John F. Palmieri spent 18 years helping to rebuild downtown Providence, two years in North Carolina fashioning an economic development office for Charlotte, and almost four years in blighted Hartford, trying to raise homeownership levels from a critically low 20 percent.

Now he'll head the Boston Redevelopment Authority, the powerful city agency on the ninth floor of City Hall that combines planning, economic development, and approval functions.

Palmieri will face many of the same issues here, only on a larger scale: creating more affordable housing in an expensive city, overseeing an office market on the verge of a boom, and dealing with impatient developers and neighborhood groups with conflicting agendas.

Through it all, he'll be expected to please a mayor known to want things done his way.

He'll also have to guide Harvard University's new campus into an Allston neighborhood nervous about being overrun, weigh in on whether downtown Boston should welcome bigger skyscrapers, such as the proposed 1,000-foot tower at Winthrop Square, and help determine if city government should abandon a much-criticized building downtown for the emerging South Boston Waterfront district.

Can he do it?

"I don't think there's any question he can," said Paul L. Barrett, Boston development director in the early 1990s and now regional director for the AFL-CIO Housing Investment Trust. Barrett was Rhode Island's state economic development director when Palmieri was head of planning in Providence, and they worked together to create a $400 million development on 30 unused acres, the Providence Mall, which opened in 1997.

"He's got a great personality for this job," Barrett said. "He's someone who's always been willing to learn and listen. That's his number one talent."

Timothy P. Kirwan, general manager of the InterContinental Boston Hotel and formerly at the Westin Providence Hotel, was chairman of the board of the convention and visitors bureau in that city in the 1990s. He worked with Palmieri on several urban improvements, including enlivening downtown Providence with WaterFire, a high-profile, ongoing show of installation art and music.

"You meet a lot of guys in the public sector, but it was always Palmieri who got it done," Kirwan said yesterday. "He had all the sensibilities to work with the private sector. He was the key guy in the administration in the city."

Mayor Thomas M. Menino said he picked Palmieri because of his "experience, his ability to get things done."

"He's a creative implementer and a respected, able manager," Menino said. "He's the right guy for the time." Development on the South Boston Waterfront and Harvard's expansion to Allston will be top priorities, Menino said.

But Menino also said he expects Palmieri to closely examine the BRA itself, which comes under periodic criticism for its potentially conflicting missions: planning the city's future, spurring the economy, and approving proposed development projects.

"I want him to look at the BRA and make sure the functions are there today that are necessary, and how we can work together to deliver product much quicker than we have in the past," Menino said. He said the BRA has "a great staff" but that Palmieri is "going to have to hire a couple of people."

Palmieri, 56, called coming to Boston "a consummate opportunity to perfect the kind of work I do in a world-class city."

"I've got to take a hard look at aligning the planning function with redevelopment," he said yesterday. "I know that's been expressed as a concern."

Palmieri said he understands politics can be played hard in Boston, but, "I spent 18 years in Providence; that's a good start. I like to think I have the skill sets to respond to the mayor's directives and objectives," Palmieri said. "I'm comfortable doing this kind of work."

Barrett agreed, and said he thought Palmieri could survive working for Menino, who has scrapped with BRA directors who had, or appeared publicly to have, their own agendas.

"He worked for Buddy Cianci," said Barrett, referring to the pugnacious former Providence mayor who recently completed a five-year prison term for racketeering conspiracy. "Mayors by nature of who they are are not shrinking violets. He's the ideal personality. He's not a guy who looks for credit."

Palmieri graduated from Temple University in 1972 and earned a master's degree at the University of Rhode Island in 1976.

He is expected to start work in Boston on Nov. 12, replacing Mark Maloney, who resigned early this year.

Thomas C. Palmer Jr. can be reached at tpalmer@globe.com.
Link (http://www.boston.com/business/globe/articles/2007/09/20/a_man_who_can_get_things_done/)

czsz

09-20-2007, 09:12 AM

whether downtown Boston should welcome bigger skyscrapers, such as the proposed 1,000-foot tower at Winthrop Square

One should hope, considering it was the mayor's proposal!

singbat

09-22-2007, 04:04 PM

http://www.architecture2030.org/current_situation/research/sea_level/boston_ma.html

awood91

09-23-2007, 08:11 PM

Boston: Boom times for office space
Shaking off development doldrums, builders try to catch up to demand
By Robert Preer

Source: Jones Lang LaSalle

Boston's Two Financial Center will be a modest downtown office building, a mere 12 stories tall, with some 215,000 square feet of office space. In June, developer Lincoln Property broke ground for the building, now rising on a former parking lot in the Leather District, a former industrial enclave on the edge of the city's Financial District.

The groundbreaking offered more proof that Boston is on the verge of a building boom, sparked by strong job growth and the end of the country's largest-ever public works project, the Big Dig, which buried a reviled elevated highway that divided downtown and opened up a mile-long ribbon of land that will be mostly green space.

Boston's last major office building broke ground six years earlier, in June 2001, before the Sept. 11 terrorist attacks and the ensuing economic downturn. The Two Financial Center groundbreaking, combined with an increasingly tight market for premium office space, buoyed hopes that new, larger commercial development will soon begin in Boston. Five or six major projects that could reshape the city's mostly low skyline have been approved or are under city review, and planning has begun on what could be Boston's tallest building.

"I really think the conditions are ripe for new development," said Brendan Carroll, research director for Richards Barry Joyce & Partners, a commercial real estate brokerage. "By most measures, this is pretty much the best market that we've seen since 2001."

Falling vacancies for office space and rising rents have fueled the upbeat outlook. In a recent analysis, commercial real estate firm Meredith & Grew reported that the Boston office market was enjoying "an ongoing recovery with nearly 4 million square feet absorbed since the vacancy rate peaked in the third quarter of 2004 at 17.2 percent." The vacancy rate for the second quarter of 2007 was 7.4 percent, according to data compiled by Jones Lang LaSalle. Rents have also increased dramatically. Meredith & Grew reported that downtown rents jumped by 43 percent in a six-month span, from $33.25 per square foot to $47.55.

"I think this will start the wave," said Lauren Picariello, research manager for the commercial real estate firm Jones Lang LaSalle.

John Cappellano, Lincoln Property's senior vice president for development, said his company was at the vanguard. "We're first in the ground, and we'll be the first to be completed. We're very confident the market is heating up," he said. "It's good timing." Two Financial Center is scheduled to open in January 2009.

The high-rise development planned for Boston could bring more than 3 million square feet of office space to Back Bay, the downtown Financial District and the waterfront. If even a significant portion is built, Boston -- a city known more for historic charm than tall buildings -- will look very different in a few years. Major projects include:

? Russia Wharf, a mixed-use combination of new construction and historic restoration on Congress Street on the downtown waterfront. Three 19th-century buildings will be incorporated into the project. Developer Boston Properties, which also owns the city's mammoth Prudential Center, has plans for 500,000 square feet of office space in a 32-story glass-and-steel tower as part of Russia Wharf.

? South Station Tower, a mixed-use development above one of Boston's main railway stations, with a 40-story, 1.3-million-square-foot office tower. Developer Hines of Houston expects to start construction this year.

? Fan Pier, a new waterfront community with 1.2 million square feet of office space. Developer Fallon Co. projects groundbreaking later this year for the first commercial building, which is to have 500,000 square feet of office space.

? One Franklin Street, the former Filene's building at Downtown Crossing. Developers Gale International and Vornado Realty Trust plan to turn the property into 600,000 square feet of office space, along with a retail, condominium and hotel complex. The project is under review.

A Renzo Piano design for Boston's Financial District would dwarf the others. The 1,000-foot-tall Trans National Place would soar 210 feet higher than Boston's tallest building, the John Hancock Tower in Back Bay. Nicknamed Tommy's Tower after Boston mayor Thomas Menino's challenge to developers to build taller, Trans National Place's proposed 80 stories would have 1.3 million square feet of office space. Last year, the city designated a developer, Trans National Properties, but review by the city has not begun.

On the drawing board in Back Bay is 888 Boylston Street, a 19-story office building that would add 439,000 square feet of space to the Prudential Center.

Optimism about Boston's future is fueled by strong job growth in the city's core industries: financial and business services, health care, higher education and biotechnology. Since 2004, Boston has added about 93,000 jobs, roughly half the number lost in the recession that began in 2001.

And the city is cleaner and greener after decades of construction chaos caused by the Big Dig. The old elevated Central Artery (Interstate 93), which sliced through downtown, was buried, and the Massachusetts Turnpike was extended under Boston Harbor to Logan Airport. A massive harbor cleanup has drawn both development and tourist cruise boats. Atop the now-underground highway, nearly 30 acres have been freed up to create the Rose Kennedy Greenway, a series of urban parks and gardens. Plans call for a YMCA, a history museum and an arts museum.

The downturn that began in 2001 hit Boston's office market hard. The situation worsened by the addition of 4.9 million square feet of office space between 2001 and 2004, after the economy had gone south.

Boston's housing market remained tight, however, and developers kept busy constructing condominiums and apartments while the office market languished.

(That early momentum in housing continues. Today, about 7.4 million square feet of residential space are under construction.)

Two Financial Center has been a microcosm of the city's shifting development scene. It was approved in 2000 as an office tower, but the original developers decided to switch to housing as the office market softened. Then, last year, Lincoln Property acquired the project and went back to office.

"They were responding to market conditions," said Kairos Shen, director of planning for the Boston Redevelopment Authority.

All the optimism, however, must be tempered with a note of caution.

Carroll of Richards Barry Joyce & Partners said that while office demand is strong in premium locations -- downtown, the waterfront, Back Bay, Cambridge and suburban Waltham -- it remains weak in other areas.

"We've seen a concentration of absorption in a few specific areas," said Carroll. "It is a flight to quality."

Shen agrees. "The big need now is for Class A office space. The remaining Class A that's available is in small chunks," he said. "It is fueling the market to build office space. We are seeing a series of projects in and around the downtown and the waterfront to fill this need."

http://www.therealdeal.net//issues/SEPTEMBER_2007/images/1188581711.jpg

statler

10-10-2007, 04:24 PM

The article is about LA but I thought the graph showing how cheap it is to build in Boston (cheaper than Dallas!) was interesting. I wonder why it seems like it is so tough to build here?

A Tale of Two Town Houses
Real estate may be as important as religion in explaining the infamous gap between red and blue states.

by Virginia Postrel

http://www.theatlantic.com/images/issues/200711/postrel-chart.jpg

In 2000, my husband and I moved out of our mid-1970s three-bedroom town house in Los Angeles and into a brand-new three-bedroom town house in Uptown Dallas. At the time, the two were worth about the same, but the Dallas place was 1,000 square feet bigger. We?ve moved back to L.A., and we?re glad we kept our old house. Over the past seven years, its value has roughly doubled. By contrast, we sold our Dallas place for $6,500 less than we paid for it.

Housing market

It?s not that we bought into a declining Dallas neighborhood: Uptown is one of the hottest in the city, with block upon block of new construction. But the supply of housing in Dallas is elastic. When demand increases, because of growing population or rising incomes, so does the amount of housing; prices stay roughly the same. That?s true not only in the outlying suburbs, but also in old neighborhoods like ours, where dense clusters of town houses and multistory apartment buildings are replacing two-story fourplexes and single-family homes. It?s easy to build new housing in Dallas.

Not so in Los Angeles. There, in-creased demand generates little new supply. Even within zoning rules, it?s hard to get permission to build. When a local developer bought three small 1920s duplexes on our block, planning to replace them with a big condo building, neighbors campaigned to stop the proj?ect. The city declared the charming but architecturally undistinguished buildings historic landmarks, blocking demolition for a year. The developer gave up, leaving the neighborhood?s landscape?and its housing supply?unchanged. In Los Angeles, when demand for housing increases, prices rise.

Dallas and Los Angeles represent two distinct models for successful American cities, which both reflect and reinforce different cultural and political attitudes. One model fosters a family-oriented, middle-class lifestyle?the proverbial home-centered ?balanced life.? The other rewards highly productive, work-driven people with a yen for stimulating public activities, for arts venues, world-class universities, luxury shopping, restaurants that aren?t kid-friendly. One makes room for a wide range of incomes, offering most working people a comfortable life. The other, over time, becomes an enclave for the rich. Since day-to-day experience shapes people?s sense of what is typical and normal, these differences in turn lead to contrasting perceptions of economic and social reality. It?s easy to believe the middle class is vanishing when you live in Los Angeles, much harder in Dallas. These differences also reinforce different norms and values?different ideas of what it means to live a good life. Real estate may be as important as religion in explaining the infamous gap between red and blue states.

The Dallas model, prominent in the South and Southwest, sees a growing population as a sign of urban health. Cities liberally permit housing construction to accommodate new residents. The Los Angeles model, common on the West Coast and in the Northeast Corridor, discourages growth by limiting new housing. Instead of inviting newcomers, this approach rewards longtime residents with big capital gains and the political clout to block projects they don?t like.

The direct results of these strategies are predictable: cheap, plentiful housing in some places, and expensive, scarce housing in others. A remodeler working on my L.A. town house a couple of years ago wistfully recalled visiting a cousin in Arlington, Texas, between Dallas and Fort Worth. He wanted to move there himself. In Arlington, he said, ?you can buy a million-dollar house for $200,000.? According to Coldwell Banker?s annual sur- vey, a 2,200-square-foot, four-bedroom ?middle-management? home costs around $141,000 in Arlington (or, for big spenders, $288,000 in Dallas), compared with $1 million or more in the L.A. area. One man?s million-dollar dream home is another?s plain old tract house.

Many people do pack up and move, if not to Arlington, then to Las Vegas or Charlotte. Historically a magnet for educated migrants, California has begun losing college-educated residents, on net, to other states, in large part because of the high cost of housing. Most of the South?s population growth since the 1980s has come from the lure of cheap housing created by liberal permitting policies, according to new research by the Harvard economists Edward Glaeser and Kristina Tobio. By lowering the cost of housing, these policies give residents higher real incomes compared with similarly paid workers elsewhere?a strong incentive to move, even if you don?t like bugs or hot summers. The mobile middle class gravitates to the cities where housing is affordable. ?If you?re your basic $85,000-a-year person, you can?t own in Los Angeles. You can?t do it,? says the Wharton School economist Joseph Gyourko. And if you?re your basic $45,000-a-year person, closer to the U.S. median household income, you?d better pack for Texas.

That doesn?t mean Los Angeles and San Francisco are in any danger of turning into Detroit and Buffalo. To the contrary, Gyourko calls them ?superstar cities,? places that offer ?a rare blend? of stimulating leisure activities and a highly productive work environment. A life that looks ?rushed? and ?materialistic? to the folks headed for North Carolina feels exciting and creative to die-hard urbanites. As a friend who recently moved from Manhattan to Santa Monica once said to me, ?When people say a place is ?good for raising children,? that means it?s boring.? But not everyone with a taste for urban amenities can afford the superstar life. As the number of affluent Americans grows, the rich are bidding up the price of living in these special places, increasing the gap between the superstar cities and everyplace else.

People in these high-price areas respond that they have no control over housing costs. Everyone wants to live in California, and the land is already full of houses. This isn?t Texas, with its miles and miles of empty old cotton fields. True, land is cheaper and more plentiful in less-developed parts of the country. But high-price areas could put many more units on the land they have. Research by Gyourko, Glaeser, and Raven Saks found that the lowest-density areas around expensive cities tend to have the least new construction and the most land-use restrictions. It?s actually somewhat easier to build in more densely populated towns and neighborhoods?the opposite of what you?d expect if a shortage of empty land were the problem.

Some of the higher price of L.A. real estate does reflect the intrinsic pleasure of living there, as I?m reminded every time I walk out my door into the perfect weather. Some of the price reflects the productivity advantages of being near others doing similar work (try selling a screenplay from Arlington, Texas). All of these benefits?and the negatives of traffic and smog?are reflected in the price of land.

But what exactly is that price? Consider two ways of computing the price of a quarter acre of land. You can compare the value of a house on a quarter acre with that of a similar house on a half acre. Or you can take the price of a house on a quarter acre and subtract the cost of the house itself?the price of construction. Either way, you get the value of an empty quarter acre. The two numbers should be roughly the same. But they aren?t. The second one is always bigger, because it includes not just the property but the right to build. Expanding your quarter-acre lot to a half acre doesn?t give you permission to add a second house.

In a 2003 article, Glaeser and Gyourko calculated the two different land values for 26 cities (using data from 1999). They found wide disparities. In Los Angeles, an extra quarter acre cost about $28,000?the pure price of land. But the cost of empty land isn?t the whole story, or even most of it. A quarter- acre lot minus the cost of the house came out to about $331,000?nearly 12 times as much as the extra quarter acre. The difference between the first and second prices, around $303,000, was what L.A. home buyers paid for local land-use controls in bureaucratic delays, density restrictions, fees, political contributions. That?s the cost of the right to build.

And that right costs much less in Dallas. There, adding an extra quarter acre ran about $2,300?raw land really is much cheaper?and a quarter acre minus the cost of construction was about $59,000. The right to build was nearly a quarter million dollars less than in L.A. Hence the huge difference in housing prices. Land is indeed more expensive in superstar cities. But getting permission to build is way, way more expensive. These cities, says Gyourko, ?just control the heck out of land use.?

The unintended consequence of these land-use policies is that Americans are sorting themselves geographically by income and lifestyle?not across neighborhoods, as they used to, but across regions. People are more likely to live surrounded by others like themselves, creating a more-polarized cultural map. In the superstar cities, where opinion leaders congregate, the perception is growing that the country no longer has a place for middle-class life. Yet the same urban sophisticates who fret that you can?t live decently on less than $100,000 a year often argue vociferously that increasing density will degrade their quality of life. They may be right?but, like any other luxury good, that quality commands a high price.
Link (http://www.theatlantic.com/doc/200711/housing)

atlantaden

10-10-2007, 06:07 PM

^^^^^^^^^^^

The graph must be mistaken; it's impossible that Boston is at the bottom of the list, just barely above St. Louis. Boston is more likely right up there with San Fran!

vanshnookenraggen

10-10-2007, 07:08 PM

Is there anything that can be done to promote smaller apartment buildings spread over many different lots than large condo towers? I know demand and land prices play a big part but I wonder if cities and towns would be more welcoming to development if they increased the scale and densities gradually rather than having a 20 story tower spring up in a neighborhood of brownstones.

a630

10-11-2007, 02:19 PM

ya Boston must be misplaced in that graph
further, more detailed reading on variables in housing cost across US MSAs:

Harvard Institute of Economic Research. Discussion Paper Number 2061. Why Have Housing Prices Gone Up? Edward L. Glaeser. www.economics.harvard.edu/hier/2005papers/HIER2061.pdf

whighlander

10-13-2007, 01:38 AM

Given that the study was done at Harvard... where its well known that they can't count......8)

A whole lot of things don't seem right as its rare that the "same house" is built on 1/4 acre and 1/2 acre in the same immediate area

The two houses might looks the same from the outside -- but inside one will be have a kitchen from Sears while the other will be all Sub Zero, etc.

Even in fairly homogeneous upper-burb like Lexington there are the houses that could have slipped across the line from Arlington or Waltham and the then there are the houses that are quintessentially Lexington.

There are even a few neighborhoods that could just as easily be in Wellesley or Weston

Between the bottom and the top on roughly the same acreage the price ranges over a factor of two to three.

Westy

statler

10-16-2007, 07:09 AM

Mayor: Incoming BRA Head Has Plenty of Work to Tackle
By Thomas Grillo
Reporter

John F. Palmieri won?t take over as Boston Redevelopment Authority director until next month, but his duties already are piling up.

?His plate is full,? said Mayor Thomas M. Menino following last week?s ribbon-cutting for the Penny Savings Bank Residences in the city?s South End. ?I?ve asked him to make the Longwood Medical Area, South Boston?s Waterfront and the Newmarket section of the city at 1010 Massachusetts Ave., top priorities.?

Palmieri, 56, will earn $168,000 annually and manage 300 employees at the city?s planning and development agency. He succeeds Mark Maloney, who left the job in January at a salary of $164,088.

Paul L. McCann, the BRA?s acting director, said Palmieri will be the BRA?s most senior director in the agency?s 50-year history in terms of age and experience. ?John will be a wonderful addition to the BRA,? he said.

While Menino declined to provide details, the four-term mayor said he would ask Palmieri to ?reorganize? the BRA.

?I want him to examine how the BRA integrates with the Department of Neighborhood Development on small business. That?s key,? said the mayor. ?And I?ve asked him to look at how we continue to grow the city to meet the challenges we face and how we can move the process along further.?

In addition, Palmieri will be faced with the planning and approval process for the 1,000-foot tower that Menino wants built in Downtown Crossing at Winthrop Square, a new City Hall for the waterfront, the future of City Hall at Government Center and the Rose Fitzgerald Kennedy Greenway, which is comprised of 27 acres made available by the removal of the elevated Central Artery.

Palmieri brings more than 25 years of experience in planning and economic development from three cities to his new post as BRA chief. Since 2004, he has served as Hartford, Conn.?s, Department of Development Services director, overseeing planning, economic and real estate development. While in Hartford, he partnered with the Chamber of Commerce to create a marketing program for the city and established a tax increment financing district for a mixed-use development at the historic Colt Firearms factory.

From 2002 to 2004, John Palmieri worked as director of economic development for Charlotte, N.C. While there, he developed an economic development strategy for the city, lured a Time Warner headquarters and a Johnson & Wales University campus, implemented a program to provide small businesses with financial assistance and instituted policy guidelines for transit-oriented development.

?Very Pliable?

Laura Knott-Twine, executive director of the Hartford Preservation Alliance, whose mission is to preserve and revitalize the city?s architectural heritage, said she will miss Palmieri.

?John could always be counted on to be available for information, support and ideas and has always been open to comments on projects,? she said. ?As director of a preservation organization, I appreciated his knowledge about preservation. He has been very resourceful in getting developers and builders to understand the importance of preserving our past.?

While Hartford lacks the controversies that often pit developers against neighborhoods, she said, Palmieri is a team builder who has a knack for getting disparate groups to work together, she added.

In 1993, Palmieri was hired by former Providence, R.I., Mayor Vincent ?Buddy? Cianci as the city?s development and planning director. The pair worked together to create an arts and cultural district, and managed development of the 1.2 million-square-foot Providence Place Mall and the $1 billion Capital Center corporate district.

?John will do well in Boston,? Cianci said in between breaks from his radio talk show on WPRO in Providence. ?He?s a good guy, very pliable and open to suggestions. There are always obstacles to development, but he is very active and very low-key. He should do well working with Tom Menino.

?I give John accolades because he?s competent, skilled and follows through. John had a good support staff and came in with me at at a time when the infrastructure for Capital Center and moving the rivers was completed. John is not reclusive, but don?t expect Demosthenes, the Greek orator of ancient Athens.?

Formed 50 years ago by the City Council and the Legislature, the BRA is Boston?s planning and economic development agency. Its role is to plan the city?s future and realize economic development through programs, planning and job training initiatives. The BRA oversees planning, zoning and design review; implements economic and workforce development initiatives to attract, retain, and grow small businesses and major industries; and partners with a variety of other city departments to spark development of housing in all price ranges.

Since its inception, the BRA has been in the middle of controversies, as developers routinely seek approvals for the tallest buildings they can build while neighbors insist that City Hall enforce zoning limits.

Palmieri?s first task could be to settle the dispute over the $192 million twin towers proposed for the Prudential Center. Avalon Properties is seeking permits for a 30-story residential high-rise on Exeter Street while Boston Properties want to build a 19-story glass office tower in front of the Prudential Building. The neighborhood and their elected representatives on Beacon Hill have made it clear that the buildings do not fit in the historic Back Bay..

Hartford, huh?
Wouldn't it have been nice to get someone from Europe? Oh well.

statler

10-29-2007, 02:39 PM

Rhode Island Capital Touted As Smart Alternative to Hub
By Thomas Grillo
Reporter

http://www.bankerandtradesman.com/newspics/Providenceskyline.jpg
Photo courtesy Providence Warwick Convention & Visitors Bureau
At least one landlord in Providence, R.I. (above), is trying to lure tenants priced out of Boston?s hot office market.

Priced out of Boston?s skyrocketing office space? Consider Providence.

At least one commercial property owner insists that the alternative to $50-$90 per-square-foot rents in the Hub is only an hour away in the Rhode Island capital. D.L. Saunders Real Estate Corp. placed an advertisement in a Boston weekly newspaper boasting the ?best deal in Boston is in downtown Providence.? The ad offers space for $16 per square foot within walking distance of the Rhode Island State House and the commuter rail.

But is there any evidence that price-weary tenants are going south?

?I wish it were the case but I don?t see it yet,? said Karl F. Sherry, a partner at Hayes & Sherry, a Rhode Island-based commercial real estate brokerage. ?I haven?t seen a major company move from Boston to Providence because rents are cheaper here.?

Privately, brokers say the property that Saunders owns at One State St. is a hard sell. They say the building?s management team is located off-site and tenants have complained that the facility lacks essential services.

Neither Donald nor Lisa Saunders of D.L. Saunders Real Estate returned repeated calls and e-mails seeking comment.

Some Boston-based companies, including the law offices of Nixon Peabody LLP, have opened satellite bureaus in Providence. But those offices have more to do with having a regional presence in Rhode Island, according to Sherry.

The idea to lure office space seekers to Providence comes as Boston?s rents are rising. From July through September, landlords increased their asking rents 46 percent in Boston, according to Jones Lang LaSalle, the global real estate firm that tracks such prices. As rents soar, office vacancy rates are at their lowest level since 2001.

Boston?s Back Bay neighborhood saw the biggest rent hike in the third quarter as the average asking price for Class A office space reached $60.36 per square foot, up from $39.90 per square foot last year, a 51 percent boost, JLL reported.

Despite some of the biggest rents in years, landlords are still giving some concessions and companies are not fleeing Boston, according to brokers.

Jay Fluck, a broker at CB Richard Ellis/New England, said despite the dramatically lower cost of space in Providence, he is not seeing a flight of Massachusetts companies. Providence?s per-square-foot rents range from $15 to the mid-$30s.

When New England-based Dexter Shoe Co. did a regional search for new quarters, they considered Providence but chose a location north of Boston. ?We have not won a big tenant yet,? Fluck said. ?I haven?t made a deal.?

That said, the bigger the spread between rents in Boston and Providence, the more opportunities for Providence landlords to attract Boston firms, Sherry noted. ?I don?t see major companies moving into Providence from Boston because rents are cheaper,? he said. ?But if Boston rents keeps rising and reach $100 per square foot, Providence has lots of good space for $25 [per square foot].?

?Institutional Investors?

Providence has 6.2 million square feet of office space. Of the 117 buildings tracked by Hayes & Sherry, 83 are Class B properties. The overall vacancy rate is 10.5 percent or 654,758 square feet, about the same as last year. But the Class A properties are seeing vacancy rates closer to 7.5 percent.

Unlike Boston, only a pair of buildings in Providence has per-square-foot rents in the $40s. They include GTECH, the 10-story glass and metal building at the corner of Francis Street and Memorial Drive and Center Place at 50 Park Row West, adjacent to Providence?s Financial District and the Amtrak/MBTA train station. The rest of the Class A properties are priced from $25 per square foot to $32 per square foot, Sherry noted.

Still, vacancy rates have fallen slightly because institutions including Brown University, the Rhode Island School of Design and some of the hospitals are running out of space on their campuses. In response, the nonprofits are moving into downtown Providence and taking office space off the market.

?The good news for us is that local companies are growing and there are more and more people who are interested in investing in Providence,? Sherry said. ?Today, we have institutional investors who are parking their money in downtown building. They are interested in investing in the city because it?s turned around.?

Still, Providence does not have a single office building in the construction pipeline. In addition, the downtown still has a number of parking lots, something that is disappearing on Boston?s landscape to make way for new construction.

?No one would build an office building on spec in Providence because the demand is just not there,? said Sherry. ?And we need the parking lots.?

Not since the dramatic transformation in the 1980s of Lowell?s mills into condominiums, performance centers and a national park has a New England city enjoyed such a rebirth.

Under the administration of former Mayor Vincent ?Buddy? Cianci, Providence underwent a renaissance in the 1990s. Public and private dollars reshaped the downtown, giving the city beautified riverbanks, an arts district, additional housing, a shopping mall, and an ice skating rink. One of the city?s biggest attractions is WaterFire, an artist installation of bonfires just above the surface of the downtown waterways.

Cianci was convicted of racketeering and served five years in federal prison after federal prosecutors alleged a conspiracy by city leaders to accept bribes in connection with redevelopment projects.
NLA

statler

11-05-2007, 12:27 PM

Survey: Boston Misses Top 10 For Office Space Construction
By Thomas Grillo
Reporter

http://www.bankerandtradesman.com/newspics/TwoFinancialCenter.jpg
B&T staff photo by Thomas Grillo
Two Financial Center, a 12-story office building with 212,000 square feet of office space, is under construction in Boston?s Leather District.

Where?s Boston? The Hub was nowhere to be found on a recently released Top 10 list of U.S. cities with office space under construction. The annual survey of cities, which focuses on new workplace development in the nation, was conducted by Colliers International, a global commercial real estate firm.

Downtown Manhattan in New York topped the survey with 4.6 million square feet. Other office markets to make the Top 10 were Chicago at 4.3 million; Charlotte, N.C., at 3.7 million; New York?s Midtown Manhattan at 3.5 million; San Francisco at 1.8 million; Philadelphia at 1.3 million; Denver at 1.2 million; and Washington, D.C., at 1.2 million. Sacramento, Calif., and Nashville, Tenn., rounded out the list at just under 1 million each.

The Boston Redevelopment Authority said the city has a handful of office projects under way that total more than 700,000 square feet. But if the Crosstown Center at the corner of Massachusetts Avenue and Melnea Cass Boulevard in Boston?s Roxbury neighborhood were added, it would bring the total to 910,000, placing the city at No. 9 on the list, according to the BRA. Crosstown started leasing space over the summer.

?Boston is on the cusp in terms of pure Class A office buildings,? said Kairos Shen, the BRA?s planning director. ?But if Colliers added research-and-development space, that?s where our big numbers and investments have been. We have 1.26 million square feet of medical research space under construction. There are a series of office projects that are gearing up, and next year?s numbers will be much bigger.?

It is unclear what data was included in the survey?s totals. Kristin Sadlon, a Colliers spokeswoman, could not be reached by press time.

Lincoln Property Co. has commenced construction on its Two Financial Center project, a 12-story office building in the city?s Leather District that will consist of 212,000 square feet of office space. In September, The Fallon Co. broke ground on Fan Pier?s first office building, a 500,000-square-foot tower.

Other projects that may not have been included in the Colliers totals include One Franklin, the redevelopment of Filene?s that will offer 475,000 square feet of office space. Also under way is Boston Properties? Russia Wharf project, which will contain 517,500 square feet of space on the city?s waterfront.

If the office pipeline were added to Boston?s totals, the city?s numbers would rival New York?s. Earlier this year, the BRA approved a proposal by Hines ? an international firm whose headquarters are in Houston ? that includes a 40-story office tower at South Station. Still in the planning stages is the city?s tallest tower to be built at Winthrop Square, which would replace a parking garage with a 75-story glass office building.

Modest Gains

In addition to its list of projects in development, the Colliers study reported that the nation?s office market showed modest gains in this year?s third quarter. The period from July through September saw the average vacancy rate drop to 12.24 percent, down from 12.38 percent from the previous quarter.

While vacancies dropped slightly, absorption, the amount of change in occupied space, totaled 18.9 million square feet. That figure is off slightly from the second quarter?s 20.7 million square feet, bringing the year-to-date change in occupied space to 51.8 million square feet. Compared to a year ago, absorption has fallen. At the close of the third quarter in 2006, absorption reached 70.1 million square feet.

Downtown district vacancy rates dropped slightly nationwide to 10.62 in the third quarter, down from 10.86 percent in the previous quarter. Nearly three dozen downtowns surveyed by Colliers recorded a decrease in vacancy over the past quarter, while 27 markets recorded an increase in downtown office vacancies.

For suburban markets, quarter-over-quarter vacancy rates were flat at 13.06 percent from 13.14 percent one last year. Twenty-eight suburban markets surveyed by Colliers reported an increase in vacancy, while 27 reported a decline.

During the same period, the vacancy rates for Class A office space fell to 10.97 percent from 11.1 percent. Meanwhile, vacancies for more economic office space fell 0.13 percentage points to 13.41 percent.

?Bearing in mind the plethora of bad news during the third quarter, the office market continued to act much like the Energizer Bunny, with demand humming along and rents ratcheting up yet again,? said Ross Moore, director of market and economic research at Colliers. ?We?re clearly worried about the slowdown in housing and the fallout from this summer?s credit crisis, but to date, the office market hasn?t given up any of the gains made over the past several years.?

In terms of new supply, 17.6 million square feet was added to the U.S. office market during the third quarter and 102.6 million square feet is under construction.

Rents in downtown and suburban Class A buildings increased compared to the previous quarter, with a 3.2 percent rise in the nation?s downtowns rents and a 3.5 percent increase in the suburbs. Downtown rents have increased year-to-date by 15.4 percent, while suburban market rents have increased 9.3 percent.

Class A downtown rents in the United States averaged $47.41 per square foot during the third quarter, ranging from a low of $14.95 in Little Rock, Ark., to a high of $95.23 in Midtown Manhattan. The national average per-square-foot rent for suburban office space was $28.24.

Last month, Banker & Tradesman reported that the biggest increase in rents for the third quarter was in the city?s Back Bay neighborhood where one tenant was paying $72.50 per square foot at 111 Huntington Ave.
NLA

underground

11-06-2007, 08:49 AM

^ Is this article about office space in Boston, or how poorly Collier conducted its research?

Cojapo

11-21-2007, 08:07 AM

I really want to bitch and moan about the lack of development in Boston. However, if you look at the population, around 550,000, there really is a good amount of development going on. Russia Wharf, Filenes, SST are good examples of some commercial development. 45 Province, Clarendon for residential and some mixed use, Columbus Center and the Mandarin. It could be worse. Some comparable size cities, although smaller as a metro region, like Oklahoma City, Memphis, Denver, Jacksonville, and larger cities like Indianapolis, Detroit and Phoenix, have almost nothing on the same scale as what is being built/proposed in Boston.
What sucks is that everytime, and that is not an exageration, everytime something is proposed, it is criticized, scrutanized, deconstructed and scaled down to the point that it doesn't make much financial sense to build in Boston.
And once it does get approved, Clarendon, SST, 1 Franklin, it takes forever to get out of the ground. Boston doesn't need to be like Dubai, approving everything no matter how hideous. It does need to stop pandering to what a small few complain about, their views from their condo, shadows on the commons, the "manhattanization" of Boston, traffic, lack of parking......
Growth is good and needed. It shows a healthy city, one that welcomes business and a strong future. If you don't want growth or development, move to northern Maine, population 5, and you will have unobstructed views, plenty of parking and no traffic.

sidewalks

11-21-2007, 10:10 AM

Comparable Sizes....

In this era of sprawling metropolitan areas it really isn't instructive to compare Boston to cities of a 'similar size'. It is impossible to separate Boston from the communities that surround it.

It's one of the reasons why I find it so irritating when transient residents of Boston complain that suburban outsiders have no right to a say about development in the city proper. I live now, only a block away from the proposed site of Columbus Center, but during the seven or so years that the project has been in the pipeline I have lived in the suburbs, Cambridge and downtown as well. I felt equally invested in the future well being of the city and the development that would shape it, when I lived in all of these places.

Which brings me to my question...should the structure and scope of our municipal government system be scrapped? Would the plans and systems of our region be more effectively administered by a governing body that was not chopped into the mishmash of fiefdoms that make up eastern massachusetts today? Home rule seems to be an ineffecient, counterproductive way to manage land planning and development. Are there redundancies that could be eliminated? Is unhealthy competition for tax dollars creating negative outcomes for the region as a whole. Perhaps our interests would be more effectively served by a regional government?

belmont square

11-21-2007, 10:22 AM

All cities/towns linked to downtown Boston through frequent, all-day fixed route transit service (Chelsea, Revere, Everett, Malden, Medford, Somerville, Cambridge, Arlington, Belmont, Waltham, Newton, Watertown, Brookline and Quincy at a minimum) function as neighborhoods of Boston in all but government structure, in my opinion. A regional government structure involving these communities would make sense and the resulting 1.2 million population would at least serve to silence the complaints by people that we are falling behind cities like Columbus, Austin and Jacksonville in population.

As for suburban outsiders, once you get beyond the communities listed above, I'm just not sure their opinions are much more relevant than those of a business traveler from Detroit who flies in once or twice a month. They may be valid opinions, but I'm not sure why Boston developers, politicians or residents should be expected to care.

lexicon506

11-23-2007, 10:46 AM

Suburban developers thinking bigger
Plans mean new revenue, amenities, and concerns

By James Vaznis, Globe Staff | November 23, 2007

The suburbs of Boston are experiencing a burst of development not seen in years, driven by towns desperate for new tax sources, retailers looking to draw the area's well-off consumers, and builders tapping into unusually huge swaths of land for new housing or corporate offices.

In Westwood alone, a proposed 4.5 million-square-foot office, retail, and condominium development called Westwood Station would be nearly four times the size of Boston's landmark Prudential Tower and promises to dramatically transform the once sleepy dairy community of 12,600 residents, which doesn't even have a downtown.

And that may not be the biggest proposal. In Weymouth and two neighboring towns, a former naval air station is slated to become a veritable city unto itself, with roughly 5 million square feet of residential, retail, and commercial space.

Around the region, at least four dozen medium- and large-size developments are on the drawing boards, under construction, or have recently opened, according to regional planning groups and state environmental review filings. Burlington, Waltham, and other suburbs with reputations as development-friendly are courting projects, as are struggling cities such as Lawrence and Lowell and even towns such as Sharon that often have been averse to major developments.

The new wave of development differs from previous growth periods because of the sheer size of many projects, some billed as "villages" or "lifestyle centers" that combine housing, retail, and offices, and may include a unique draw, such as a luxury movie theater. In the past, development typically came in single steps - a housing project, an office park, or a retail establishment - but developers say today's suburbanites, tired of stop-and-go traffic and office park isolation, want all those features within walking distance.

These new developments come with a delicate trade-off. Some communities are making permitting far easier, occasionally cutting years off the process. In return, developers are providing roads, athletic fields, and other amenities to help offset the strain on local budgets, in addition to the new property tax dollars.

Some homeowners, environmentalists, and a few regional planners warn that the new developments will alter the suburban towns' quality of life, bringing more traffic, higher school costs, and environmental damage. In several cases, projects are being pitched near highway interchanges, next to or on top of crucial aquifers that supply drinking water, or close to a similar project in another town.

"People move to a Westwood because they don't want to be near a downtown Boston, and Westwood will have an urban feel to it. I don't think it will be the same town at all," said John Harding, president of the town's Everett Forbes Neighborhood Association

Pointing to other developments under consideration south of Boston, he said, "How many Talbots do you need?"

In Westwood, the Planning Board approved a special zoning permit Tuesday night to allow for Westwood Station, one of the state's largest suburban developments ever, over the objections of critics who say it would forever alter the character of the town by attracting about 55,000 vehicles a day and some 1,700 new residents. To be built next to the Route 128 commuter rail stop, it would have shops, restaurants, offices, and 1,000 condominiums, as well as hotels and parking garages.

The development would produce an estimated $12.6 million annually in net property tax revenue for Westwood, more than 20 percent of the town's operating budget.

"Communities are desperate for cash these days, and commercial development, in particular, generates strong revenues," said Marc Draisen, executive director of the Metropolitan Area Planning Council. "You find some communities eager - some may say too eager - to encourage large-scale commercial developments."

Westwood Station developers Cabot, Cabot & Forbes, Commonfund Realty Inc., and New England Development will spend $60 million on off-site improvements, including new athletic fields at Westwood High School, a second public safety building, and a new MBTA platform. Developers of other Greater Boston projects have promised fire engines, conservation land, and, in at least one case on the South Shore, a school.

In Wayland, a developer has proposed a $140 million shopping, residential, and office project - including a municipal building - on former Raytheon Co. property. In Burlington, meanwhile, Nordblom Co. is planning to recast Northwest Park, a 1950s-era office center, into a bustling, tree-lined center of shops, offices, and housing, while a New York firm intends a similar but smaller redevelopment of the 119-acre Polaroid Corp. site in Waltham.

"Given how tight municipal budgets are, many more communities in 2007 are actively looking to expand their commercial tax bases, more than any time in the last 20 years," said Greg Bialecki, the state's undersecretary of business development.

But business leaders say the uptick is not enough to prop up the state's economy, especially as analysts predict slower-than-anticipated growth through 2011. Completion of the projects could take a decade or longer.

"Compared to other regions of the country, I wouldn't call it a land rush," said David Begelfer, chief executive officer of the Massachusetts chapter of the National Association of Industrial & Office Properties. He later added, "We are a long way from seeing anything from a growth cycle or a building boom."

Developers and towns have targeted aging office and manufacturing complexes along congested Route 128, as well as on pristine land in far-flung suburbs. But some residents are objecting to the changes.

In Waltham, where sleek glass office buildings along Route 128 serve as an icon to suburban commercial success, some residents have been campaigning against overdevelopment, blocking construction of an approximately eight-story building across from the common.

And along the rolling landscape of Sharon, a former lakeside summer resort town where 5,000 acres are in conservation, many residents are outraged that cranberry bogs and a habitat of the endangered Eastern box turtle could be replaced by a 500,000-square-foot shopping and office complex that could draw 19,300 vehicles a day.

Critics also fought six eight-story senior housing buildings, containing 624 units, going up on Rattlesnake Hill, a spot where the endangered black rat snake slithers.

Earlier this month, Neighbors Against Destructive Development lobbied a Special Town Meeting to curtail the growth, but failed to convince voters in Sharon, a bedroom community of 18,000.

"I feel like that guy in Tiananmen Square standing in front of the army tank. I can't fight this," said Paul Lauenstein, a Sharon Planning Board member and self-described environmentalist.

But Walter "Joe" Roach, Board of Selectmen chairman, said homeowners need relief from taxes.

"It won't lower taxes, but it will stabilize taxes so we don't go for overrides as often as we have. If development is done with balance, it's not that bad," said Roach, a retired high school custodian.

Near the proposed Westwood Station, selectmen in neighboring Canton created a website last summer critical of the project, hired a public relations firm, and turned down $1.3 million from the developers for road improvements. Canton officials say a proposed exit for Westwood Station on Interstate 95 at Dedham Street in their town will flood residential streets with traffic, while other vehicles will add to major traffic backups at the decades-old junction of Interstates 95 and 93, also located in Canton.

This month, the selectmen notified Governor Deval Patrick about plans to sue the state, on grounds that Massachusetts officials' recent approval of Westwood Station lacked adequate highway traffic remedies. On Tuesday, the town took the first formal step, filing a notice with state environmental regulators that it intends to appeal.

Adding to the anxiety for Canton and other Westwood Station critics, including some Westwood residents, is a spate of other retail-based projects clustered nearby. New developments have been proposed or recently opened in Dedham, Sharon, Foxborough, and Mansfield, while the traditional enclosed malls, Walpole Mall and South Shore Plaza, are both planning major expansions to compete.

Farther south, an Indian casino could go up in Middleborough.

Many critics question whether small towns like Westwood, where development is overseen by a volunteer planning board and one town planner, has the expertise to review a project equivalent to nearly four Prudential Towers. The boards, the critics say, typically approve a Starbucks, Dunkin' Donuts, or a small subdivision.

Towns, though, insist projects are being thoroughly reviewed.

"I understand the concern that Westwood Station might be a mini-city and could distract from the character of the town, but we have worked hard to make it a place where Westwood residents will want to come to and be proud to say it's part of Westwood," said Steve Rafsky, chairman of the town's economic development advisory board.

Roughly half the project - including all the retail - would open in two years. The remaining construction would hinge on market demand, an approach developers of some larger projects are taking.

The developers remain bullish.

"Part of the problem in Massachusetts is we are not keeping enough young people here," said Jay Doherty, Cabot, Cabot & Forbes president. "They want more public transportation options and more amenities in their lifestyles. They want more shopping and restaurants than prior generations, and if they can't find it here they will go somewhere else."

http://www.boston.com/news/local/articles/2007/11/23/suburban_developers_thinking_bigger?mode=PF

shockingboston

12-11-2007, 01:57 PM

Suburban developers thinking bigger
Plans mean new revenue, amenities, and concerns

... but developers say today's suburbanites, tired of stop-and-go traffic and office park isolation, want all those features within walking distance.

...Some homeowners, environmentalists, and a few regional planners warn that the new developments will alter the suburban towns' quality of life, bringing more traffic

Developments like this will not ease traffic.

I believe traffic would be a problem, if the majority of these towns accepted their major development projects. A real example of place where their suburb is very commercially developed is, Washington D.C. The traffic down there is unreal. I believe most of it is due to the development of other cities around D.C. (Arlington (VA), Alexandria (VA), Roslyn (VA), Bethesda (MD), Lanham (MD), etc.).

Lrfox

12-11-2007, 02:34 PM

"Many critics question whether small towns like Westwood, where development is overseen by a volunteer planning board and one town planner, has the expertise to review a project equivalent to nearly four Prudential Towers"

this quote almost seems laughable considering some of what's approved for Boston (See: Fan Pier Developments). I don't see how these small planning boards could do much worse than anyone else. These suburbs have the same NIMBYs that plague Boston, therefore many of these projects will sit as idle as the ones in town.

That being said, I'm not a fan of this type of development. This "New Urbanism" may work in Florida, but it's not good for a metropolitan area like Boston. As has been mentioned, this type of development will increase traffic and that's not what these towns need. If people want all of these things, move INTO the city. spend the money on a nice townhouse because they'll come relatively inexpensively in the down market, and move where the amenities are already in front of you.

This type of development may be good for the people who live right next door, but the infrastructure in these little towns is nowhere near ready for this type of development. It works in Florida because they do it in areas that are totally undeveloped. they put massive boulevards that head towards the center of town that can handle the volumes. Westwood, Weymouth, and even Middleborough can't handle that. the last thing 128, route 3, or 495 needs is higher traffic volumes of people heading into these little towns.

On top of that, Boston is losing population to the 'burbs at a pretty high rate and it's crap like this that is the cause. It's a shame that this type of massive development is shunned where it should be welcomed (Boston). and the towns that are going to be thrown for a loop because of this crap are getting it.

a630

12-12-2007, 03:25 AM

I think it's a bit more complicated.
Boston is not losing population to the suburbs. The entire region is growing, very very slowly compared to other economically healthy regions. It has a higher domestic out-migration rate than domestic immigration rate. Only international immigration makes up for this loss, and barely.
The entire region suffers from chronic affordability problems that will outlast any housing crisis. Whereas positive productivity in places with an elastic housing market translates into population growth (Dallas, Houston, DC, Charlotte), in Boston, NY, SF, LA, Miami, etc. it translates into higher costs of living and (hopefully) higher wages. Which situation is more economically sustainable is arguable; I have my opinion that it is not the latter.
So this suburban growth has benefits for the region, and this has benefits for the city of Boston in sustaining economic growth.
As for what shape it takes, zoning law determines that. Until you can overturn 80 years of jurisprudence, these awkwardly situated clumps of new urbanist stuff are the best you can hope for.
As for transportation planning, it's never a pro-active process, the accommodation for growth will come down the road at a very high cost.
Don't worry, it's not California yet.

palindrome

12-12-2007, 10:22 AM

I hope this is the right thread...

Menino says BRA will adopt new approach to development
Boston Business Journal - by Eric Convey Journal staff

The Boston Redevelopment Authority -- the agency that oversees city planning -- needs to be revamped so it can take a more proactive roll in guiding what's built and where with an eye toward stimulating key industries, Boston Mayor Thomas M. Menino said Tuesday morning.

"Our new BRA director, John Palmieri...and I share the conviction that today's global competition demands that we reorient our planning and economic development," Menino told a breakfast hosted by the Greater Boston Chamber of Commerce at the Westin Boston Waterfront hotel.

"Boston must become more proactive in envisioning and creating economic growth. City government must reach out to business and support you," he added.

The work needs to expand beyond the development to also include more assistance for existing companies, he said.

Specifically, he said, the city needs to do more to help the state's financial services industry, which he said employees 80,000 people, occupies 20 million square feet and generates half a billion dollars of annual state income tax.

"It's critical to our economy," he said.

In January, Menino said, he will convene business school deans and top executives to find ways "to provide added value for financial services firms and to solidy Boston as a global center for years to come." Part of that will include finding ways to better-train Bostonians for jobs in the industry, he said.

Menino also turned to a topic he first raised a year ago -- his controversial proposal to move City Hall from its current location at Government Center to a new site on the South Boston waterfront.

Noting that some critics had panned the proposal, he said Tuesday morning that some "facts" are beyond debate: "We have a costly, inefficient building that needs millions of dollars in maintenance, and we have a geographically small city with a large, underutilized site right in its center."

In an interview following the speech, Menino told the Boston Business Journal that he continues to pursue the possibility of splitting City Hall operations between a new waterfront location and a neighborhood-oriented facility in a building the city purchased in Dudley Square.

"We've got to move some of our operations there," said Menino. "We have to have a center in the city close to the public."

But with the Internet, he said, many City Hall operations would work fine from the Seaport District.

In a question-and-answer session -- the questions were filtered by the Chamber of Commerce -- Menino said the city will "address concerns" so the Boston University biolab can be built in the South End.

"I have no fears about the biolab opening in the next year or so," he said.

Asked about the presidential candidates' focus -- or lack thereof -- on urban America, Menino said all the candidates "except for one" are ignoring cities. He accused candidates who talk about immigration of doing so to "cover up" an unwillingness to tackle issues such as health care and housing.

He said it was among "phony issues" on which candidates are focusing.

But Menino said suburbanites and city dwellers now face the same issues, the only difference being that in the suburbs "they have yards."

Asked about pilot schools, Menino said, "We have some issues with the union but the union has agreed to have a meeting in the first part of January to discuss the possibility of (opening more schools)."

To a question about keeping graduates of Boston colleges and universities in the city, he said, "we have enormous opportunities" but getting people between 20 and 34 "engaged in our city is a real challenge." The expansion of "creative" industries is helping, he said.

Responding to another question, Menino said the city is "doing a very good job balancing the requirements of (expanding) universities with neighborhoods." The existing BRA process for overseeing expansion of academic facilities is working, he said.

"We always work...to make sure the neighborhood has their say in redevelopment," he said, but "we need expansion for universities and health care institutions in our city. Those two industries aren't going anywhere."

Finding "the expansion space they need" is a "challenge," he said.

Menino praised three companies that he said produced an extraordinary number of summer jobs for teens: State Street Corp., John Hancock Financial Services and Bank of America.

Eric Convey can be reached at econvey@bizjournals.com

Link (http://boston.bizjournals.com/boston/stories/2007/12/10/daily17.html?t=printable)

BarbaricManchurian

12-17-2007, 02:00 PM

The Boston Globe finally had enough of the extreme anti-NIMBYism when they opposed small, low impact cottages:

GLOBE EDITORIAL
Cozy, sensible, unwelcome

December 14, 2007

AN IMAGINATIVE local developer wants to build sensible, 1,000-square-foot cottages for single people and couples whose housing choices might otherwise be limited to condos or unnecessarily large and expensive single-family homes. But residents in Easton and West Bridgewater have slammed the door in his face. It's another disappointing setback in the effort to bring rationality to state and local housing policies.

Developer Nick Mirrione of Easton envisions clusters of one- and two-bedroom cottages mostly priced between $245,000 and $345,000. He proposes seven cottages per acre, offering enough space for detached garages and small yards. Town planners like the concept. And buyer interest is strong, says Mirrione, especially among single women and empty nesters. But the project failed to win the two-thirds vote of Town Meeting required to amend zoning ordinances in Easton and West Bridgewater. NIMBYism again trumped a modest effort to ease the state's housing crunch.

The concept of small, dense cottage communities is catching on nationwide, including in states that compete with Massachusetts for biotech jobs. For some, small is just a matter of taste. But the greatest draw of cottages is as starter homes, one of the rarest commodities in the state. So long as towns cling to inflexible requirements that single-family homes be built on an acre or more of land, however, the entrance to homeownership will remain barred.

Mirrione simply wants to build homes that are attainable. But now he is left with no choice but to pursue his cottage proposal through Chapter 40B, the anti-snob-zoning law that allows the state to override local zoning bylaws as long as developers set aside one-quarter of their units for low- and moderate-income buyers. That is likely to set off another battle with residents. But there is little room to negotiate with overwrought opponents who greet even a simple cottage development as if it were a teeming slum.

Maybe the state could step in with local-aid incentives for towns that create zoning relief for cottage communities. But similar carrots haven't worked especially well in other efforts to build moderately priced housing. A better approach would be to alter state law so that zoning amendments require only a simple majority of town meeting votes instead of an unrealistic two-thirds. Tina Brooks, the undersecretary of the Department of Housing and Community Development, supports such a change, calling it "fair and achievable." A still braver strategy would be for the Legislature to allow planning boards and selectmen to establish "by right" permits for smaller homes and cottages without the approval of town meeting.

The housing problem is out of control when even modest cottages fall under attack.

whighlander

12-18-2007, 02:52 AM

It's come full circle in suburban housing -- except for NIMBYs

The first place that I lived in Greater Boston after I returned from graduate school was in Lexington. It was built in the early 1950's to accommodate the flood of people moving to the inner suburbs immediately post WWII.

My first Boston Area house had 40 feet of frontage and a yard that went back almost 85 feet from the corner -- I think with streets that would translate to near 10 houses per acre. My current house, also in Lexington has about 1/5 of an acre of land with 80 feet of frontage {it was built even closer to WW II in 1947}. I've never understood why we couldn't do the same once again in suburbs such as Lexington, Burlington, Woburn that have water and sewers and good access to Boston. Finally, along major thoroughfares throughout the inner metro area where they can be served by frequent buses, etc., we should be allowing 4, 6, even 8 story apartments and mixed use developments.

However, we've got to stop paving over rail beds for bicycle trails that only serve the elite. Instead -- self-propelled electrically driven frequent commuter rail could solve a lot of the traffic problems for in-bound commuting. Unfortunately, ultimately only people being able to live near where they work in the suburbs will really make a difference and that means major zoning overhaul.

The real challenge for Greater Boston and New England is still how to ?long-term accommodate? the tremendous immigration from throughout the US and indeed the rest of the world attracted by The Great Research Universities.

The Universities are currently undertaking an unprecedented massive construction boom as they are feed off the global knowledge driven economy. We have all that is necessary to dominate the world?s knowledge economy. However, due to the region?s inability to affordably accommodate the graduates? transition from living in dorms or rooms for rent, to urban apartments, or suburban single family and everything in-between ? we tend to lose a lot of potential good residents to cheaper places to live. Eventually, when they?ve made a name for themselves in research or business, we can get some of them back {or equivalents from other university centered communities} because they get offers that allow them to afford the half million dollar starter homes. These people should be putting down roots here, just as they are leaving graduate school and becoming the builders of the future opportunities for the rest of the population.

Westy

cden4

12-18-2007, 12:00 PM

Westy, I was with you until this:

"However, we've got to stop paving over rail beds for bicycle trails that only serve the elite."

I'm not sure which elite you're talking about here. You can buy a bicycle for less than the price of a monthly commuter rail pass. Other of walking, I can't think of a mode of transportation that is less elite than bicycling. People of all ages, levels of education, and income do it.

You do have a point that if we pave over rail beds, it makes it harder to restore rail service. On the other hand, it preserves the railbed from private developers encroaching. It's easier to restore a publicly owned bike path into a rail line than it is to buy the land back from private owners, who hopefully have not built on it. I believe there are actually clauses in many cases that say rail may be restored at any time.

Keep in mind that towns such as Arlington and Lexington had their chance for rail but passed it up due to fears of crime and traffic. All we can say to them is take a look at Davis Square if you want to see what could have happened to them. They passed up the opportunity to REDUCE traffic and create vibrant districts with many people walking and bicycling and not needing their cars to get around. Traffic can be managed (residential parking + public meters). The crime just doesn't happen. Perhaps the tides are turning now; I sure hope so.

On your other point, I totally agree that the densities of the 1950s made a lot of sense in many places. I live in Somerville, where the houses are very close together, and I really enjoy it. It makes the streets walkable and the distances to travel short, and it allows many people to live comfortably in a relatively small space. Living in a suburb with 1+ acre zoning would be absolute hell as far as I'm concerned.

vanshnookenraggen

12-18-2007, 12:20 PM

Keep in mind that towns such as Arlington and Lexington had their chance for rail but passed it up due to fears of crime and traffic. All we can say to them is take a look at Davis Square if you want to see what could have happened to them.

You need to understand that many people form Arlington and Lexington look at Davis Sq and think that they dodged a bullet by blocking the Red Line. I love Davis Sq but that is me, but I know there are many who only see it as congested, dirty, and full of homeless people. There are people in Arlington and Lexington who would have a shit fit if you seriously proposed turning Arlington Center and Lexington Center into new Davis Squares. Most of us like the low scale, urban feel of the place but there are many who live in the suburbs because they prefer it.

chumbolly

12-18-2007, 02:53 PM

Lexington plus train does not equal Davis Square; it would be more like Newton Center. Arlington Center plus train would be awesome. Too bad, so sad.

Ron Newman

12-18-2007, 04:04 PM

Seems to me that Arlington has become more Davis Square-ish already, even without the T, in that beer-and-wine licenses have produced a proliferation of ethnic restaurants. The #77 bus line is the most frequent in the entire T system, and always seems to be well-used whenever I ride it. The sections of Arlington that adjoin Mass. Ave. are densely settled and quite walkable.

nico

12-18-2007, 08:36 PM

Guess like anything, it all depends on how it is done. If it were above ground and caused noise (as the blue line does in part of East Boston) as a neighbor, I would strongly oppose it. Which line is being extended matters too. Not sure (and I mean that) if the impact that the orange line has had on Malden center would be good or bad, but moving it in Charlestown sure did seem to help. Again, it was the EL, so its form was certainly an issue for abutting neighbors. In the case of Lexington, it is a pretty desirable town for many people; sure they wouldn't want to mess w/a good thing.

statler

01-02-2008, 10:22 AM

Developers Face Constant Challenges
By Thomas Grillo
Reporter

The year began with a storm of protest that forced Mayor Thomas M. Menino to withdraw his support for a 22-story dormitory on Beacon Hill.

As 2007 ends, a well-organized effort is under way to convince the Boston mayor to kill plans for a pair of high-rises at the Prudential Center.

Some dismiss the community activists as NIMBYs, the acronym for residents who fight development on their block. But protesters insist that they are not against development but want any new construction to fit the scale of Boston?s historic neighborhoods. The story was all too familiar in 2007: Developers propose something, and neighbors work to reduce the size and scope of the project.

In January, Menino backed Beacon Hill residents in their fight to prevent Suffolk University from building a high-rise dormitory at the edge of their neighborhood. The university had planned to raze the former Metropolitan District Commission headquarters at 20 Somerset St. and build 550 dorms. But the plan received strong opposition from neighbors who said a nearby residence hall already is the source of numerous complaints.

Last summer, Suffolk abandoned the plan and purchased a building in Downtown Crossing. The Boston Redevelopment Authority approved Suffolk?s proposal to convert 10 West St. in Downtown Crossing into a property that will include 274 dorm beds with ground-floor retail.

Today, the fight has shifted to the Prudential Center, where Boston Properties and Avalon Bay Communities want to build a 19-story office building at 888 Boylston St. and a 30-story residential high-rise across from the Boston Public Library. Some neighbors and elected officials insist the buildings are too tall.

Despite a flurry of opposition from Prudential Center tenants, as well as the Back Bay and Bay Village neighborhoods, Menino has not curbed his enthusiasm for the project.

?There was opposition to the Mandarin at first but we worked with the community to come up something everyone can live with,? Menino told Banker & Tradesman last week, referring to the $230 million Mandarin Oriental hotel scheduled to open next summer on Boylston Street. ?The public review process for the two buildings is still ongoing.?

Gregory Selkoe, a former BRA official and Menino critic, said neighborhood opposition does not guarantee that the mayor will pull the plug on a proposed development.

?The mayor won?t abandon his support for a project just because there is neighborhood opposition ? just look at the [biotechnology] lab,? Selkoe said about the controversial research center under construction in the South End despite protests about studying some of the world?s most dangerous viruses in the densely populated section of the city. ?It very much matters who is lined up against it, who has political clout and who has the mayor?s ear.?

Need proof? Just ask a handful of property owners at Strada234, the luxury condominium development on Causeway Street near the TD Banknorth Garden. Some of the property owners have urged the mayor to halt plans for Lovejoy Wharf, a 14-story luxury condo development with views of Boston Harbor and the Leonard Zakim Bunker Hill Bridge.

Robert Sarno and 21 other Strada residents filed suit in Suffolk Superior Court to stop the $85 million project at 160 North Washington St. and 131 Beverly St. being developed by Ajax Management Partners. The project would feature 250 residential units and 40,000 square feet of retail space at the underutilized 2.1-acre waterfront site.

?Apparently, the city hears only the voices of established neighborhoods and not the voices of neighborhoods like ours, [which are] in transition,? said Sarno. ?We want to make our part of the city as attractive as our Beacon Hill neighbors. But it?s proving hard to do when Causeway Street residents get treated as second-class citizens. What do we have to do to become valued Bostonians??

While some abutters say the mayor only listens to a portion of city residents, developers tell a different story. While builders would not to talk on the record for this story, fearful of retribution from Menino, privately they say the mayor micromanages every development decision.

?The approval process is so arduous, risky and arbitrary that only the biggest developers with the deepest pockets have the staying power and ability to push their projects through,? said Selkoe. ?Only the most connected can build anything in this city. All roads lead to Rome and in this case, Rome is Menino?s office at City Hall.?

In response, a BRA spokeswoman said the agency works with developers and community members to review project proposals, all of which go through a lengthy public and community review process before any decisions are made.

A ?Very Strong? Picture

But not every project faced opposition in 2007. Joseph Fallon broke ground on Fan Pier to pave the way for the city?s most ambitious 21st century neighborhood. The $3 billion dollar development spans 21 acres across nine city blocks on Boston Harbor. It will include 3 million square feet of residential, commercial, hotel and retail space.

Last summer, the BRA approved the $700 million One Franklin St. project, better known as the Filene?s redevelopment. The 39-story mixed-use project by Gale International and Vernado Realty Trust will bring new office, hotel, residential and retail space, in addition to a brand-new home for Filene?s Basement. Construction is expected to be completed in 2011.

On the office market side, 2007 continued to offer good news for downtown Boston landlords with rising rents and shrinking vacancies. Overall, Boston?s 58 million square feet of office saw the vacancy rate fall to 6 percent at the end of 2007, down from 8.5 percent one year ago, according to Jones Lang LaSalle, the global real estate services and money management firm. Average asking rents soared to $54.80 at the close of the year, up from $37.31 last year, a 47 percent increase.

Nearly every Boston submarket saw a decline in vacancies while rents increased, according to Jones Lang LaSalle. Back Bay had the lowest vacancy rate at the end of 2007 with just 3.6 percent, down from 5.4 percent last year. Average rents in the Back Bay grew to $65 per square foot, up from $40. In Charlestown, vacancies fell to 15.1 percent from 17.4 percent in 2006. Rents in Charlestown increased to $31, up from $25 in 2006.

In the Financial District, the vacancy rate dipped to 5.9 percent at the close of the fourth quarter, down from 8.6 percent last year while rents soared to $59.36, up from $40.39. At North Station, where several new residential and retail developments are under construction or in the pipeline, vacancies slipped to 9.6 percent from 15.3 percent while average rents increased to $28.19, up from $27.83.

In South Boston?s waterfront, vacancies fell to 8.6 percent from 10 percent, as rents climbed to $33.92 from $27.83. In South Station, vacancies were flat at 4 percent as rents increased to $42.29 in 2007, up from $26.51.

Among the biggest deals in 2007 was Blackstone Group?s $39 billion purchase of Equity Office Properties, which was the nation?s biggest private real estate sale of all time and made Blackstone the largest Class A landlord in Greater Boston. Ropes & Grey leased more than 400,000 square feet of space at the Prudential Center.

?It?s been a banner year and the picture is very strong when you think about the real estate fundamentals,? said Ronald K. Perry, executive vice president at Meredith & Grew. ?Rents are up across the board, sale prices are up, vacancy rates declined significantly and net absorption was strong as businesses continued to grow.?
NLA

whighlander

01-02-2008, 06:32 PM

Re: Paving Rail

"I'm not sure which elite you're talking about here. You can buy a bicycle for less than the price of a monthly commuter rail pass. Other of walking, I can't think of a mode of transportation that is less elite than bicycling. People of all ages, levels of education, and income do it"

Nothing wrong with bicycling for exercise, Nothing wrong with rock climbing or polo as exercise either

However, in this climate --you can not expect any proportional fraction of the population to commute via a bicycle

In the winter --only die-hards will do it
In the summer you need showers at the end point of the commute

That's why I said it is for the elite

On the other hand the Commuter Rail through Arlington and Lexington was still functional into the 1970 time frame

I wouldn't be opposed to a subway with a bike path on top -- a la South West Corridor -- but realistically -- the expense of subway is untenable
One possible solution {initial phase of a later restoration of full service} would be an electric bus shuttling back and forth along the Minuteman Bike Path Right of Way from Alewife to Arlington Heights and then regular Bus street service up Mass Ave from there

Westy

vanshnookenraggen

01-02-2008, 06:58 PM

Wouldn't that just be the 77 bus? Or the 79? They come pretty regularly, and as much as taking the bus sucked it was great to have them.

whighlander

01-02-2008, 07:39 PM

"Wouldn't that just be the 77 bus? Or the 79? They come pretty regularly, and as much as taking the bus sucked it was great to have them."

No,

The difference is that in traffic the 77 Bus can become just another stuck vehicle en route to Arlington Heights via Mass Ave in Cambridge and Arlington Center.

On the other hand a 77-like electric Rail-Bus has its own dedicated Right Of Way and so when it stops to pick-up or discharge passengers {especially if the bus needs to spend some time with a mobility impaired passenger} ? then the Bus wouldn?t slow down other vehicles. In addition, with a dedicated ROW a rail-bus doesn't get stuck at Red Lights when someone is making a late Left, etc.

As opposed to traditional Internal Combustion powered Commuter Rail -- If the Rail-Bus is electrically powered via overhead trolley wire or has on-board Hydrogen Fuel Cell electricity generation -- then the neighbors shouldn't complain about emissions or much noise

With a continuing stream of frequent electric rail busses Arlington Heights would be connected usefully by one transfer from DTX and South Station

Ordinary street buses could then leave Arlington Heights for Lexington Center via diverse routes {e.g. Mass Ave, Lowell Street, Concord Ave.} offering more frequent service and a broader range of routes that would be served

Everyone in Arlington and Lexington would benefit -- and perhaps they would see the long-term benefit of the Red Line or some alternative service extended to the Hartwell Ave. industrial zone where a giant parking garage could divert Rt-2, Rt-3 and Rt-128 commuters. The Hartwell terminal would also support frequent service to the various industrial and office venues along Rt-128.

But ? I doubt that any of this will come to pass in the next generation unless the price of oil was to rise to $399 per barrel

Westy

vanshnookenraggen

01-02-2008, 10:09 PM

The 77a electric bus used to go out to Arlington Heights, there are a number of old trolley poles still along Mass Ave, but I believe residents voted to tear down the wires. Arlington is changing though and I'm sure one day not too far off you will see Arlington residents clamoring for improved transit.

whighlander

01-02-2008, 10:40 PM

Re: ?The 77a electric bus used to go out to Arlington Heights, there are a number of old trolley poles still along Mass Ave??

Not only that: I saw the repaving of a section of Mass Ave a few years ago. Just below the Heights -- they had to cover over rail still in the street. Mass Ave in the early 20th Century through the immediate WW II period at least? -- had a Trolley to Harvard Square. This complemented the Commuter Rail into North Station running on the Minuteman Bikeway ROW.

My guess is that the electric buses probably came in the late 40's to replace the trolleys and then diesel buses replaced them in the 60's. It was consider being modern at the time.

I doubt that we will see new street rail lines anywhere where it is not already located {at least in part ? e.g. Heath Street branch} in the Boston area.

However, rail in a protected ROW {such as the Minuteman Bike Trail} is making a major comeback in many cities in the US and in Europe. I suspect that we will see some new surface light rail in protected ROW {old rail road tracks?} in Boston in the next 30 years or at least a start by 2030 {exclusive of the Green Line to Somerville and Medford}

If I was to guess at likely candidate locations:

1) Arlington
2) Charlestown
3) Chelsea
4) Southy {SilverLine}
5) Roxbury

WEsty

vanshnookenraggen

01-03-2008, 12:52 AM

Yeah, the same places they used to go before the powers that be decided to rip up the rails. We have very short foresight in this country.

ChunkyMonkey

01-23-2008, 03:54 AM

I thought both Russia Wharf and Filene's redevelopment has already started?

Economy fears may ground some Hub office tower plans
By Scott Van Voorhis | Wednesday, January 23, 2008 | http://www.bostonherald.com | Business & Markets

Stock market tumult and growing recession fears are casting a shadow over the Hub?s development scene, with plans for new office towers now facing an uncertain future.

More than a half dozen new high-rises and mixed-used development projects have been proposed in downtown Boston and its environs, from a 1,000-foot skyscraper to the redevelopment of the landmark Filene?s building.

But, due to growing economic uncertainty, only one or two of these projects are likely to start construction in the next few years, according to some industry executives. So far, the only new office building where full-scale work has begun is at Fan Pier on South Boston?s waterfront.

William Wheaton, an MIT economics professor, said job growth and demand for new office space in Boston, despite recent rent increases, have been relatively weak. A downshift in the economy will only intensify those trends.

?The bloom is off the rose,? Wheaton said. ?I would say demand is pretty tepid right now. If anything, that outlook is a little more bearish.?

Industry executives are watching closely a number of projects that have been taxiing on the runway, but have yet to take off. These include Boston Properties? plans for a new office tower at Russia Wharf, a $600 million remake of the Filene?s block and a long-planned tower over South Station.

Developer Dean Stratouly, whose 33 Arch St. was the last high-rise built in Boston, sees room for just one more tower in the next few years.

He?s placing his bets on Russia Wharf, backed by deep-pocketed Boston Properties.

?Beyond that, I think it?s the next real estate cycle before you see any meaningful development of new office towers,? he said.

Article URL: http://www.bostonherald.com/business/general/view.bg?articleid=1068419

statler

01-23-2008, 07:09 AM

These include Boston Properties? plans for a new office tower at Russia Wharf, a $600 million remake of the Filene?s block and a long-planned tower over South Station.

Killing the Filene's project would kill Downtown Crossing.
I think Menino will do everything he can to push that project through.

type001

01-23-2008, 07:14 AM

I thought both Russia Wharf and Filene's redevelopment has already started?

They certainly have. I don't think that VanSoarhies leaves his cubicle much.

statler

01-23-2008, 07:16 AM

^^ Doesn't mean they can't still be killed.
The developers can just walk away.

type001

01-23-2008, 07:36 AM

^^ Doesn't mean they can't still be killed.
The developers can just walk away.

True, but it makes more sense to build now. If the developers already have the proper loans in place, they can build during the recession, possibly paying cheaper wages and costs. Banking on the fact that the recession will be over by the time construction is finished, they should have a good amount of tenants lined up.

Cojapo

01-23-2008, 07:36 AM

I find it hard that the developers would walk away from theses sites. I could see Columbus Center or SST being delayed, but the other two are well into site prep, especially Russia Wharf. We are hitting a low point in our economy, but like the last low point, 2001, it lasted about a year and picked back up. It's not all gloom and doom!

czsz

01-23-2008, 02:38 PM

The same forecasts "doomed" 111 Huntington and 33 Arch St. a few years ago. Remember, the Empire State Building was even completed well into the Depression...

Suffolk 83

01-23-2008, 03:08 PM

this recession is alot realer and will last far longer than that one in 2001. some say the days of recessions are over, but until some things change structurally, a full blown recession for a long time could hit. structural would be oil, a war overcrowding private loans, and ALOT of foreign investment that could start getting scared and pull out. I really doubt the SST is going to happen anytime soon. Filene's and Russia should get done even though very little has really been done to either.

pelhamhall

01-23-2008, 03:14 PM

I think the Filene's site is only 500,000 SF office, so it's somewhat buffered in a bad economy. The mix of uses include office, retail, hotel and residential - so hopefully this will get built because each different use insulates the developer somewhat from risks in one particular market. Still risky, of course.

I have my doubts over the viability of the South Station Tower, given it's large upfront costs and large amount of office space to be built on spec. We shall see...

Russia Wharf already has a lot of money committed to it, and I doubt the city will let Boston Properties leave the half-demo'ed facades up like a Western ghost town. Plus, I think they have an anchor tenant (Wellington)

At Fan Pier, Fallon is "pushing dirt" right now. I'd want to see steel rise before I believe this is happening, although again, at only 500,000 SF of office, it's likely he'll proceed - it's not a 50-story 1M SF++ tower or anything - just a rinky-dink little Burlington-style office park.

statler

02-05-2008, 06:22 AM

Stupid articles that cover more than one development:

Development slowed by financing delays
By Scott Van Voorhis | Tuesday, February 5, 2008 | http://www.bostonherald.com | Real Estate

Principals of even some of Hub?s grandest development schemes are scrambling to firm up loan packages and financing amid Wall Street turmoil and recession fears.

Despite vows to begin work soon, developers behind projects that would remake the landmark Filene?s block, build an $800 million air-rights complex over the Massachusetts Turnpike and raise a skyscraper over South Station are still working to firm up their financing.

?This is a very tricky time and it is a real serious down cycle in real estate,? said John Rosenthal, who is lining up city and state approvals to build a major air-rights project near Fenway Park [map].

At Downtown Crossing, the team pushing plans to redevelop the landmark Filene?s block is just now homing in on a $500-million-plus construction loan.

That is roughly six months after John Hynes, the project?s lead local developer, had said he hoped to begin full-scale work.

Hynes acknowledged a combination of factors has helped push back the project?s timetable. They include permit delays and the international credit crunch that has made it more difficult for developers to secure financing.

Despite the complications, Hynes said he is closing in on a deal with lenders and plans to have a loan wrapped up in the next two months.

?There just aren?t many lenders willing or able to commit to $500 million at a pop for one city project,? Hynes said. ?That was not the case a year ago.?

Meanwhile, Texas real estate firm Hines, which plans to build a tower over South Station, is also in the money hunt. Hines executive David Perry said, recently, the financing package it needs to begin work on the $800 million skyscraper is ?in process.? The project won regulatory approvals in 2006.

Columbus Center developers have decided to forge ahead with construction of their $800 million air-rights complex over the Turnpike, even as they scramble to replace a key piece of financing.
Article URL: http://www.bostonherald.com/business/real_estate/view.bg?articleid=1071298

stellarfun

02-05-2008, 07:59 AM

^^^
I notice he no longer mentions Russia Wharf, which supposedly has a major tenant for the office space. I suspect Columbus Center has enough money on hand to at least build the deck; given the lead times, they have probably already ordered the steel.

LeTaureau

02-05-2008, 08:25 AM

^I believe the major tenant you're talking about is Wellington Management Co. They will probably fill up the whole building (something tells me they're following in SSgA's footsteps...)

statler

02-22-2008, 09:22 AM

Office rents reach dizzying heights
$100-a-square-foot deals could be taste of what's to come as demand tightens

By Thomas C. Palmer Jr., Globe Staff | February 22, 2008

For the first time in almost a decade, office rents in downtown Boston have moved above the eye-popping $100-a-square-foot mark.

So far just a few well-heeled companies have agreed to pay three-digit rates for their offices, involving relatively small amounts of space on the upper floors of some of Boston's trophy towers. Executives in the real estate industry predict that, with demand for high-quality space exceeding the available supply, more companies will pay up for such offices.

"You will see more deals done above $100 a foot," said James R. Brady, director at the real estate firm Cushman & Wakefield of Massachusetts Inc. "It's not going to be the norm, but it's going in that direction."

The $100 price is the peak for a tight Boston office market where rents have been rising rapidly. Owners of several top-quality towers are now asking for annual rents in the range of $80-$95 a square foot; the average asking price in class A buildings now is about $67 a square foot - up from a low of $38 in 2003, when there were vacant floors galore.

The last time rents tipped above $100 a square foot was in 2000, according to the real estate firm Jones Lang LaSalle, and involved just a few leases that were signed right before the office real estate market started a steep decline. Jones Lang LaSalle represents the Blackstone Group, the largest office landlord in the city, at two of its buildings.

Even amid warning signs the economy is at risk of sliding into recession, local real estate executives said demand for office space in Boston right now is so strong that already-low vacancy rates are dropping - and rents are rising correspondingly.

"The fundamentals of supply and demand are such that really good space is scarce," said Ted Oatis, a principal of Chiofaro Company, developers of the International Place.

The last new office to open in Boston was in 2004. Although there are a number of buildings under construction or well-along in development, including projects at Fan Pier, Russia Wharf, and Two Financial Center in the Leather District, local real estate brokers expect space at these locations to be absorbed quickly.

Among the companies that have signed leases for $100 a square foot or more is Barclays Global Investors, which added about 2,900 square feet of space to its Boston offices on the 44th floor of One International Place.

Also at One Post Office Square, Saracen Energy Partners LP, a Houston-based investment firm, signed a lease for about 3,300 square feet on the 38th floor, at an average price of $100 per foot. And Four Winds Capital Management paid a little over $100 a square foot for about 1,500 feet of additional space last year at 60 State St.

The companies either declined to comment or could not be reached for comment. Indeed, few others in downtown Boston's business and real estate communities would talk publicly about busting the $100 rent threshold. Landlords who are getting it don't want to be seen as bragging, and tenants - never inclined to talk about how much their paying in downtown rents - are especially reluctant to acknowledge they're paying top dollar.

Several real estate brokers said the tenants who paid the $100 price needed to renew leases or add more space but didn't want to go to the expense and trouble of moving. Just outfitting new office space from scratch can cost $120 per square foot for a financial firm, and even more for some white-shoe law firms, according to a recent study.

Local executives agree that the higher rents can be attributed in large part to "the Blackstone effect." That's a reference to the Blackstone Group, which bought the nation's largest commercial real estate portfolio about a year ago from Equity Office Properties Trust. The deal included the Boston buildings One Post Office Square and 60 State St. among about a dozen downtown.

"They came in and they raised rents overnight 20 percent," said Mark Roopenian, director of leasing for Chiofaro Co., which co-owns and manages the two International Place towers. "God bless them."

That had the effect of showing other landlords what prices the market would bear.

"When Blackstone took over, there was a decisive change in the tone of the market," said Oatis, Roopenian's colleague at Chiofaro. "They've got to be credited for being aggressive in their leasing efforts."

Oatis and Roopenian refused to comment on whether their firm has rented space at International Place for more than $100 a square foot. The building is one of the city's premier office locations and commands among the highest rents.

Andrew J. Maher, managing director at the Blackstone-owned Equity Office, said he and his colleagues have been amused by the "Blackstone effect" term.

"It seems to be a term coined from some of the brokers as a negative phrase," he said.

"Our strategy is to take some very well-located buildings," Maher said, "and invest some substantial money in them," including at least $50 million into four downtown towers. "We're finding tenants are willing to pay up for those spaces because of the quality of life and the recruiting tool it provides for them."

The rent spike also comes as the investment market for commercial properties has slowed, part of the fallout from the subprime mortgage crisis that has led to a shortage of lending for real estate in general.

David A. Martel, executive director of Cushman & Wakefield, acknowledged that the Boston rental market appears at odds with other economic trends.

There's a lot of bad news in the economy, and it's hard to ignore it," Martel said. But he said many firms in downtown Boston are financially healthy and are seeking additional space. "When you look at the requirements in the marketplace, out of the 16 top companies, 13 are growing," Martel said.

Thomas C. Palmer Jr. can be reached at tpalmer@globe.com.
Link (http://www.boston.com/realestate/news/articles/2008/02/22/office_rents_reach_dizzying_heights/)

Suffolk 83

02-22-2008, 01:10 PM

hey! some positive news... if true, then the office buildings currently proposed or in early construction process should go through even given the tough financial times... if investors know the rents are huge, which I'm sure they already knew, they will build, and firms will invest in Boston. gives me some hope SST will get built which I was really starting to doubt. and the 1000 footer could happen as well. If you build it, they will come, and obviously there's demand if rents are this high so all this talk about who is going to fill these new office spaces is hogwash, it wont be a problem

statler

02-26-2008, 06:30 AM

Builders, Architects Oppose Creation of Individual Community Building Codes
By Aglaia Pikounis
Reporter

Builders and architects are pushing lawmakers to strike a section of the much-touted energy bill that they say will increase construction costs, cause confusion in the industry and hurt economic development.

A provision in the legislation would enable communities to establish and enforce their own building codes on both new and existing buildings, they say. Currently, all structures are constructed under one mandatory uniform building code.

?If [contractors and designers] had to comply with 351 cities? and towns? building codes, there would be chaos,? said Paul Moriarty, a Norwell attorney and code consultant. ?There?s no way they?d be able to do it. It would stop them from doing work up here.?

Separate versions of the legislation were passed by the House and Senate, and a conference committee is hashing out the differences. The legislation is intended to reduce energy consumption and promote alternative energy sources.

Those in the construction industry oppose a section in the Senate version that would enable cities and towns to set up green communities. As part of that, towns would be able to create and impose building codes on new and existing properties that ?will assist green communities in achieving their community-based goals and objectives.?

?The whole point of the state building code is there?s one book that we all go to that dictates everything from how high a doorknob should be to ? how to build exterior walls,? said John Nunnari, who works at HMFH Architects in Cambridge.

Nunnari said under Massachusetts law, communities already are allowed to petition the state Building Board of Regulations and Standards, or BBRS, if they want to adopt a more restrictive regulation that isn?t in the building code. ?If they wanted every new building to be built with grass on top of the roof, then the city or town could go to the board and make the case that it?s a regulation they want in their town,? he said.

If there is no consistency in building standards from one town to another, the cost of construction and design services will rise, opponents argue.

Nunnari, a member of the Boston Society of Architects? Legislative Affairs Committee, worries that it could discourage development because developers would find it easier to build in states with consistent building regulations.

?We don?t want to make Massachusetts unique in the sense that we have 351 building codes. We want one building code, and that code should be the same here as it is in California or Arizona,? he said.

If each town could create their own building standards, ?builders wouldn?t know how to prepare for that,? said Norwell Building Inspector Tim Fitzgerald.

?We want one unified code,? added Fitzgerald, who is president of the Southeastern Massachusetts Building Officials Association.

A ?Fragmented? System

The legislation could set the state back 35 years to a time when the state had a costly and outdated building regulatory system, according to critics. It wasn?t until 1972 that a state building code commission, which eventually became known as the BBRS, was established. The first statewide code was adopted in 1975.

?The consequences of returning to a fragmented building regulatory system such as existed prior to 1972 could be devastating to the commonwealth and include confusion in the design and construction industry, added time and delay in the design and construction of buildings, increased cost of construction to businesses and potential homebuyers, uneven code enforcement, a weakening of public safety standards, and arbitrary approval or denial of the use of certain materials or construction methods,? the Massachusetts Building Code Alliance wrote in a letter to legislators.

The alliance is a coalition of contractors, designers and material suppliers that includes the Massachusetts Society of Professional Engineers, Home Builders Association of Massachusetts and Boston Society of Architects.

The commissioner of the Massachusetts Department of Public Safety Thomas G. Gatzunis also has concerns.

Gatzunis sent a letter to Sen. Stephen C. Panagiotakis, chairman of the Senate Ways and Means Committee, noting that under state law only people who are code-trained and certified can enforce the building code. The section at issue would empower green communities to determine who enforces the local code, according to Gatzunis.

?There are no requirements or other qualifiers and therefore regulators who are not properly trained may be authorized to enforce the code. This poses a significant public safety issue,? he wrote in the letter.

Designers and contractors also are troubled by another section that would require the BBRS to fully adopt the latest International Energy Conservation Code. They say the section legislates the adoption of a particular building code and appears to prohibit the BBRS from making any changes.

?Essentially, by doing that, you?re stuck with the International Energy Conservation Code and you?re not able to amend it in any meaningful way,? Nunnari said. ?You shouldn?t be legislating the building code regulations.?

Nunnari said regulations are easier to change, and anyone can petition the board for regulatory change but it must be science-based. ?The legislative process isn?t always based on strong science. It?s often based on public opinion,? he said.
NLA