NORTHEAST SNAPSHOT, MARCH 2011
BOSTON’S URBAN RETAIL MARKET
Boston’s retail marketplace has always been a vibrant environment that houses a vast workforce population, thousands of university students and steady tourism. This diverse blend of consumers provides the demographic for a wide array of retailers to succeed. Although all sectors of Boston’s commercial real estate industry have felt the effects to this economic downturn, the urban retail sector has been a little more resilient than the rest. We have seen the bottom, but the climb back will be a gradual one. A multitude of underutilized properties are poised to undergo redevelopment in 2011 and 2012. As new retailers begin to enter the market, a steady transformation of the retail landscape is sure to follow.
The majority of new “for lease” signs reside in the windows of Boston’s famed Newbury Street. As most landlords held their ground on unrealistic rent expectations (upwards to $200 per square foot), we saw many of the 1,000- to 3,000-square-foot tenants either driven out from a lack of sales or forced to relocate to lower-cost blocks. On a positive note, two larger space deals were completed: United Kingdom-based clothing and home furnishing retailer AllSaints Spitalfields has replaced Pottery Barn at 122 Newbury Street and Los Angeles-based apparel store Forever 21 has opened in the partially converted Danker & Donahue parking garage at 343 Newbury.
Whereas Newbury Street holds the title of Boston’s retail row, its parallel thoroughfare, Boylston Street, has slowly become the focus for new growth. The Shops at The Prudential Center is always reinventing itself with a new and better tenant mix. Additional retail space was delivered to market when The Hynes Convention Center converted much of its street frontage to pave the way for two new restaurants: Towne Stove & Spirits, which opened in 2010, and a relocation of The Capital Grille, which starts construction this year. Other recent transactions that brought new and attractive façade renovations to the buildings they occupy include the relocation of TD Bank to 535 Boylston at the corner of Boylston and Dartmouth, and Verizon Wireless into 745 Boylston St.
Restaurants & Retailers
In terms of new growth, restaurants are unquestionably leading the pack. From fast casual to fine dining, it seems like we get to try out a new hot spot every month. Boston-based burrito chain Boloco has had its expansion efforts on cruise control for the past 3 years. Their quick, healthy and energetic “inspired burritos” concept continues to grow and thrive in Boston.
The Back Bay Restaurant Group moved Joe’s American Bar & Grill up one block to new digs at Newbury and Exeter. After closing the doors of their French bistro Bouchée Urban Brasserie at 159 Newbury St. they rapidly renovated the space to make way for a relocation of their Italian concept Papa Razzi formerly located at 271 Dartmouth St. The former Papa Razzi location was replaced with Lolita Cocina & Tequila Bar and the former Joe’s Space was re-leased to The Met Bar.
Since the completion of the Boston Convention & Exhibition Center, South Boston’s Seaport District has been booming with new development. Luxury retailer Louis Boston moved from their historic building in the Back Bay to Fan Pier in the Seaport District, but yet again the bulk of new store openings in this area belong to the restaurant sector. Noteworthy deals on the horizon include Legal Harborside, a three-floor, 20,000-square-foot flagship space at Cresset’s Liberty Wharf overlooking Boston Harbor. Alongside Legal at Liberty Wharf will be (Jerry) Remy’s Grill, Temazcal Tequila Cantina, and Del Frisco’s. Smith & Wolensky’s plans to open a second Boston location at Boston Properties’ Atlantic Wharf.
Trinity Financial’s proposed mixed-use development at One Canal Street in Boston’s North Station will include approximately 280 high-end residential apartments and 60,000 square feet of retail space. Final design for One Canal is pending approval from the Boston Redevelopment Authority.
Our firm is pleased to be working with Trinity Financial as they are embarking on yet another new mixed-use development in Boston’s North Station, a market that has seen significant development initiatives since the completion of the Big Dig. One Canal will be a 12-story, ground-up development overlooking the Rose Fitzgerald Kennedy Greenway. We are in the final stage of negotiations with a national grocer to anchor the retail. The project will also offer an additional 15,000 of retail space on the street level. The location of this project will conveniently serve the residents of Boston’s West End and North End. Construction is slated to commence this fall.
— Mark Browne and Hank Blake of Boston-based Berenson Browne Advisors
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