Nineteen retail buildings were completed during the first quarter of 2017. This resulted in an addition of more than 140,000 square feet in Boston retail space. This development has continued a trend that was evident in 2016. During the second quarter of 2016, 24 buildings equaling more than 755,000 square feet were added. Twenty-five structures were built during the third quarter of last year, adding over 226,000 square feet, and 26 buildings accounting for more than 306,000 square feet were completed during the fourth quarter. More than 2.7 million square feet of retail space was under construction at the end of the first quarter of 2017.
With these recently completed retail center construction projections, the retail space in Boston exceeded 338 million square feet in nearly 28,000 buildings and almost 2,000 centers by the end of the first quarter of 2017.
Here are some of the most significant additions to the Boston retail market:
- Millennium Tower has helped revitalize Downtown Crossing. Several retail businesses have recently moved in or plan to move in soon. These tenants include Cafe Nero, Primark, Roche Bros supermarket, and Old Navy.
Planned Retail Development Projects
Easy access to new retail space is critical. Customers, suppliers and employees all must be able to reach new stores amid neighboring retail development. Because of this fact, areas located along Route 495 and Route 128 are prime development locations as well as highly sought after retail rental spots. More than half of scheduled retail development is located along these routes.
Here are some planned retail developments in the works:
- Several necessity retailers are scheduled to complete expansion projects over the next two years. These retailers include CVS Pharmacy, Wegmans and Whole Foods.
- A 200,000-square-foot lifestyle center, which includes retail development, is scheduled to be completed on Route 3 North.
- Currently in development, this multi-phase project is transforming the old Boston Garden site near Causeway Street. The project will take several years to complete but will ultimately include nearly 2 million square feet of retail shops as well as restaurants, residences, hotels and offices.
- Located on Congress St., the Bullfinch Crossing project will be another multi-purpose complex that will include nearly 3 million square feet of retail, office, residential and hotel space. The complex will include six buildings when it is completed.
- A large project, signed off just this summer, is about to commence in Washington Village. This five-acre development effort will include 99,000 square feet of retail space as well as residential additions and street and plaza development.
- Scheduled to be completed in the summer of 2018, the South Bay Shopping Center is expanding by 700,000 square feet. Retail development will be complimented by residential space, restaurants, a hotel and movie theater.
- After years of fine-tuning development plans, developers finally settled on the blueprint for Tremont Crossing. This nearly 2-million-square-foot, multi-building project will include a BJ’s Wholesale Club as well as residential development and a museum.
- Yet another huge development project, the Dot Block effort will comprise more than 10 buildings and span 400,000 square feet. Retail development is included along with new residential units.
- The supermarket Stop & Shop hopes to build a new, larger grocery story on an 11-acre property that is near the Boston Landing complex. The expansion during the first phase would include 5,000 square feet of retail space with additional retail development planned for the second phase. The project would be situated close to the new commuter rail stop as and the Massachusetts Pike.
- Retail developments on Seaport Blvd. are scheduled to be completed by the end of the year. Nearly all of the 200,000 square feet of retail space is committed.
- Retail businesses including a food emporium will be added at 100 Federal St.
- The Prudential Center added retail tenants including Eataly, Under Armour and Earl's Kitchen and Bar.
- The Fenway area is planning on adding two projects with significant retail development.
- Price Chopper will be adding a 293,000-square-foot anchor grocery store at Maynard Crossing, which is scheduled for opening in summer of 2018. The facility is expected to host banks, other stores, residential apartments and restaurants as well.
Investing in the Boston Retail Real Estate Market
Given the booming retail real estate market in Boston, you may be wondering how to get a piece of the action. The growth indicates that there is money to be made from smart investment decisions.
Those interested in investing in Boston retail space should begin by talking with a qualified retail real estate agent. Tap into the knowledge of others who are familiar with the market before you make a significant investment. Professionals can also help you manage the details of the actual transaction once you've found your investment property.
Take a look at market prices for typical Boston retail space over the course previous quarters as part of your research.
For instance, if you look at retail space that is at least 15,000 square feet, you'll find that price per square foot dropped between the third quarter of 2016 and the fourth quarter of 2016. During the third quarter, 31 buildings were sold for a total of $434.4 million. This represented about 2.1 million square feet, which translated to a price of $198.87 per square foot. Looking at the same metrics during the fourth quarter, you'll find that 30 buildings were sold for $231.7 million. These units totaled 2.6 million square feet, but the price per square feet dropped to $87.86.
One investor recently decided to purchase a large retail building on Great Road. This major transaction closed at the end of 2016 and involved the sale of Brookshire Shops. The 75,000-square-foot facility sold for $33.5 million, which amounted to more than $442 per square foot.
Another investment decision was made by the Hampshire Company, which purchased the 84,000-square-foot BJ's Whole Club in Quincy. Located at 200 Crown Colony Drive, this building is viewed as a good investment because of the possibilities of expansion into a multi-use complex with the addition of residential development.
Once you've selected your property and closed the deal, you may want to hire a professional property management company to help ensure that your new investment stays in excellent condition and to help manage tenants who will be occupying your new space.