Will High-Profile Approvals Spark Building in Boston?
When the city of Boston signed off on a pair of high-profile developments last week, officials may have been sending a message about the need to kick-start development. On Thursday, the Boston Redevelopment Authority approved two major projects that developers want to add to the site of the 3.2 million-square-foot Prudential Center. Boston Properties Inc. plans to build a 17-story, 422,000-square-foot office tower at 880 Boylston St. Nearby, AvalonBay Communities is planning a 188-unit, 27-story apartment complex. That the projects won approval despite community reservations about their size shows how urgently the city wants to move projects forward. Boston has approved these projects as a sign that we need to make something happen from a development standpoint, said Stephen Brodsky, head of Grubb & Ellis Co.s Boston regional market. As in many markets, getting new construction off the ground has been extraordinarily difficult lately in Boston. Even top-drawer developers sometimes run into a brick wall. In perhaps the most glaring recent example, construction of One Franklin Street, the $700 million mixed-use redevelopment of Filenes department store was recently suspended. Despite their long track records, lead developers John Hynes III and Vornado Realty Trust were unable to complete a financing package. But projects like the Boston Properties and AvalonBay developments at the Prudential Center stand a better chance of getting financed than many projects in Bostons pipeline, Brodsky argued. These are two projects that are located at absolute Main and Main, he said. Their owners rank among the top developers in the country, he added. Market trends also appear to be in the developers favor. Bostons office sector has added little new inventory in recent years, further tightening an already space-constrained market. The developers have said that they want to break ground on their projects next year. For Boston Properties office tower, that schedule might hinge on whether an anchor tenant will sign on, allowing the project to obtain financing. Boston Properties has not disclosed any information about pre-leasing, but local sources suggest that a tenant like the law firm Fish & Hamilton P.C. might be a fit. The firm is in the market for about 150,000 square feet, and plans to relocate at One Franklin Street fell through when the projects financing plans delayed the development schedule.