As seen in Banker & Tradesman 

With the warmth of summer typically comes a slowdown in the commercial real estate market. Considering the current state of the national economy, the expectation for this summer was particularly tepid. However, the Boston market is heating up as years of infrastructure improvements and the completion of the Rose Kennedy Greenway impact lease activity.

The future is also bright for rent growth in 2009 and 2010 as the current influx of capital improvement dollars sets the stage. All in all, the Boston office market is benefiting from major changes in transportation and public landscape.

In June, news broke that J.P. Morgan would relocate and expand from its office at 73 Tremont Street to occupy approximately 130,000 square feet at Seaport Center. The announcement underscores the great success story at the building. It also illustrates how public perception of the South Boston Waterfront has shifted due to the MBTA Silver Line, infrastructure improvements, the opening of fine restaurants and other amenities, and activity generated by the BCEC. It is now recognized as a viable and convenient office market. Since completion of Seaport Center's capital improvements program the first class office building has recently recorded nearly 200,000 square feet of lease transactions. It is reflective of a revitalized waterfront, as construction continues at Channel Center and Fan Pier, and the residential population grows.

The Rose Kennedy Greenway, a long-awaited corridor of parks, fountains, gardens, trees and art is nearly complete. Property owners along the Greenway are now starting to realize the benefits. Recently, investment advisory firm Wellington Management announced plans to anchor Russia Wharf, currently under construction directly across from the Greenway. The project, under development by Boston Properties, is expected to include approximately 550,000 square feet of office space of which Wellington Management will occupy 450,000 square feet. The firm will consolidate from a few different locations and move into its new headquarters in 2011 for 15 years.

The Boston office market will likely experience rent increases in 2009 and 2010, as several landlords complete extensive capital improvement projects currently underway. Blackstone is actively renovating the lobbies of One Post Office Square, 225 Franklin Street, and 100 High Street. Likewise, TIAA-CREF continues façade and lobby work at 99 High and One Boston Place. These projects, combined with new construction, will enhance the tenant experience and help landlords boost cash flow. 

For many years, the Greenway and the “emerging” waterfront have generated buzz. However, the public remained skeptical as to when their much touted benefits would be realized. The wait is over. Tenants and landlords are now taking advantage of the connectivity, and the vibrant new neighborhood the South Boston Waterfront has become. These exciting improvements to Boston’s cityscape and the steady lease activity they create ensure that this summer will be anything but slow.