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Get ready for more life sciences along the water: Biotech developer pays Gillette $80 million for a parcel on A Street
By adamg on Tue, 09/28/2021 - 10:36pm
A joint venture between a New York developer and a Los Angeles biotech venture-capital firm last week paid Gillette $80 million for a 2.4-acre parcel at A and Binford streets that Gillette now uses mainly for parking.
The parcel, which runs from A Street along the southern side of Binford to Fort Point Channel, is across Binford from the parking lot where the Channel nightclub used to be, before it was torn down for construction of the tunnels that connect the former end of the Massachusetts Turnpike to the Ted Williams Tunnel. The tunnels also run under the parcel that Breakthrough Properties, a joint venture of Tishman Speyer of New York and Bellco Capital of Los Angeles, bought from Gillette last week.
Tishman Speyer is best known for its holdings in New York, but also owns One Channel Center, just down A Street, as well as 125 High St. downtown and part of the Pier 4 development in the Seaport.
Bellco was founded by two doctors, Arie and Rebecka Belldegrun; their son, Dan, is CEO of Breakthrough Properties, which has an office at 125 High St., and which describes itself as
A first-of-its-kind collaboration in real estate development, which came together through a shared passion that combines Tishman Speyer’s global real estate platform with Bellco Capital’s industry-making biotechnology entrepreneurship to capitalize on the rapidly expanding - yet substantially under-supplied - life science real estate industry.
In a 27-page agreement attached to the deed, Breakthrough agreed to grant the city of Boston an easement for building a berm along Fort Point Channel. The city has made such a berm a key part of its climate-change planning, to prevent rising seas and fiercer storms from reclaiming South Bay, which used to be an actual bay, by way of Fort Point Channel.
The agreement also lists things Breakthrough cannot put on the site, including carnivals, palm readers, tobacco shops, gun ranges, porno shops, prisons, drive-through restaurants, massage parlors, houses of worship, food pantries, tattoo parlors and funeral homes.
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Comments
I really
I really would love to see data that supports the need for all these new 'labs' and would all be rented.
Just remember folks as we cheer this stuff on, this means housing isn't being built instead. We have a housing crisis right now, and not too sure building lab space that will sit empty for a while before its rented is the right move for our region right now when people are being pushed out of their homes due to rising rents and housing costs.
Better than a parking lot
Going on the basis of "Developers want to maximize their profits" I'd be willing to give them the benefit of the doubt that they think they can rent the lab space quicker and for a higher sum than the equivalent housing. (Which means it's also in demand.) Keeping it as a parking lot helps no one.
I've coming around to the idea that instead of strict zoning, affordable housing requirements, etc the city should instead make it as cheap, easy, and quick to build and let the market do it's thing.
The more requirements the city adds for these big projects, the fewer overall units will get built, and the more pressure there will be on older (previously affordable) buildings to push out tenants while they do a gut renovation and market it for even higher sums since doing so requires no approval if the exterior doesn't change.
Furthermore...
It would be awesome if the Mayor could say, "I COMMAND THY: Build a 200 unit residential building with tasteful, unique architecture that nevertheless seamlessly fits into the neighborhood. All units must be affordable to those who are low income and are longtime residents of the city. Units must all be 1500sqft, 2-3 bedrooms yet the overall size of the building be unimposing. It must have a parking spot for every resident but also a public park and other community amenities. The developer must be local with close ties to the community and all contractors be union workers who live in the city."
But the city can't make that demand. Or rather they can, but no one will build.
So instead the city and developers get into a game of cat and mouse where both sides try to chip away at each others demands.The end result is lousy.
There are far fewer units which are extremely expensive. The look of the building is lacking. The city pats themselves on the back because a whopping ~10 units will be won in a lottery that has 100+ entrants. And even the affordable units aren't actually that affordable.
Between 1880-1930 the city exploded with tremendous growth. There where few restrictions on building in those times which fueled the frenzy. There are problems with the unregulated approach but if the goal is to build more affordable everything, that's the trade off which needs to be made. Or just stay the course and accept very little will be built and, apart from a few lucky lotto winners, it will be for the most well off. Oh, and lots of expensive lab space.
Excellent points, all around.
Excellent points, all around. I often ponder the fact that our most desirable neighborhoods were built in an era with no community meetings or strict zoning laws. I'm no libertarian and I think proper zoning and allowing community input is crucial, yet our city's history in this regard is an interesting counterexample. If there's a right balance we need to keep looking for it.
Speculative or Pre-leased?
I don't know if there is data on how much of the "lab space" development is on spec or if any is pre-leased.
I think I have seen this market cycle a few times before and it rarely ends well.
Remember, developers make their money by developing real estate. Lenders make money by lending money. All developers need is a gullible funder or a lender that needs to place funds and they are off to the races. We will be living with the consequences in 2 - 3 years.
Life Science/Labs
Are probably seen as being more resilient to any shift to work-from-home since lab work really can't be (legally) done from home. Sure, there's computational work and/or data analysis which can be done remotely, but things which require a lab are still going to need dedicated space. Boston has become the preeminent global center for the field so I think it's likely the demand won't be exhausted soon.
BostonDog covers the housing aspect pretty effectively. We lard on so many requirements -- affordable housing set-asides, parking, linkage payments, height restrictions, floor area ratio restrictions, effects of shadows, traffic analyses, green space -- that the only place to make money if you're paying market rate for land is at the top end of the market.
This parcel is going for over $750/sq ft -- and that's JUST FOR THE LAND. You're not going to get housing built on that parcel for under $1,000/sq ft once you add in climate mitigation. And that's not affordable.
Is this the lot that actually
Is this the lot that actually surrounds part of the Gillette building? I know there was a larger ~6-acre lot sold to developers in 2019, which I thought was the entire "Channelside" lot, unless this was subdivided. Is this separate from the Channelside lot or a subdivided part of it?
It's been awhile, but I'm pretty sure the Channel club was the smaller lot on the other side of the Channelside lot -- on Necco St. Or maybe that's still considered part of the Channelside lot, as an appendage, but it's the smaller lot that was supposed to be GE's new HQ, before they sold it off to another lab developer (separate from this and the 2019 sale). This lot was also used as the staging area while they fixed-up the old Necco factory buildings as GE's current HQ.
In unrelated development news, the Thirsty Scholar Pub location was just sold to a developer for $2.6M. I know they had closed a few months ago, but it wasn't known whether temporary or permanent:
https://www.bldup.com/posts/somerville-pub-sold-for-2-5-million
It's between Binford and the plant.
It stretches from A Street to the FPC and looks thin. The Channel was on a part of the land sold to GE. Originally the club sat in the large surface parking area that was owned by Boston Wharf Co from the dawn of time, but was sold to Gillette in the 80s. Again, the Big Dig engineers tore down the old club to facilitate construction of the casting basin and Gillette never had any interest in re-building and leasing it.
I think you're correct
I used to park there in the early 90's just as that Necco St Garage was being built. $5/day if I recall correctly. I'd walk up to Summer St to get to my office. I miss the lunches from the Milk bottle cafe - especially the pasta salad in a pita.
The Channel also used to have
The Channel also used to have a side/back area inside called "Necco Place". They did tear down the building later in the 90's as part of the Big Dig, but I think it was more out of convenience, since the building had been abandoned for years.
There's an interesting site of historical ariels. I couldn't figure out a direct link to the map I viewed (maybe need to pay), but I entered the Channel's address (25 Necco St, Boston, MA), and then did two zoom-in clicks, and then clicked on the "Ariels" side tab, which listed a bunch of years. The closest relevant years were 1978 and 1995, both of which had the old Channel building on the waterfront, next to the two Necco factory buildings (now GE's HQ). Then click on 2001, and the building is gone (but with a lot of Big Dig construction inside FPC itself). If you switch back-and-forth between 1995 and 2001, it becomes more apparent.
https://www.historicaerials.com/viewer
I did find an answer to my first question -- BuildUP makes things a bit more clear.
Apparently the Channelside lot was subdivided, and according to the photos in the links below, the 2019 sale was the larger parcel (everything outlined in yellow, except the subsection outlined in red), while this new sale is the smaller "Parcel 3" (the part outlined in red):
https://www.bldup.com/posts/2-acre-seaport-parking-lot-sold-for-80-million
https://www.bldup.com/projects/232-a-street
The Channel earlier had at least one different name
In the late 1970s it was The Mad Hatter, and it may have been called other things before or after that.
I remember an older friend
I remember an older friend mentioning going there when it was the Mad Hatter, which from what he said, was a disco back then (before my time, though, so going by word).
The historical ariel map mentioned in my previous post unfortunately didn't have any years when the building existed as the Channel. Granted, they're just ariels, so you only see a roof anyway. But, 1978/1995 were the closest years available in the map.
I believe it was also briefly renamed as a strip club (forget the name), until the mob hit closed it for good shortly after, so it also wasn't actually called the Channel when the building became abandoned. I missed a lot of the end drama, though, since I was living in Montreal in '92/93.
Meanwhile
Our state's Death Sciences industries are still evading their hiring requirements for the tax credits they received (Raytheon) and in increasing jeopardy of lawsuits over their business practices (gun manufacturers).
https://www.bostonglobe.com
https://www.bostonglobe.com/2021/09/30/business/citing-support-second-am...
Could someone explain???
Life Sciences to me and why they require so many labs?