Archive for the 'Boston Retail Leasing' category

Wait ’Til Next Year?

Tight pre-leasing requirements and a dramatic slide in rents and commercial values all but iced new construction in 2009, and at a recent NAIOP Massachusetts roundtable, Portfolio & Property Research CEO Bret Wilkerson predicted that office incomes would not trend upward again until 2011. That presumption, on its face, would seem to preclude all construction but build-to-suits (a quietly strong category in 2009).

However, Wilkerson and others have predicted a sharp swing upward in rents from 2011 to 2013. Wilkerson predicted a “phenomenally interesting and exciting cycle” beginning in 2011, and said Boston is PPR’s top market nationally for forecast rent growth until 2013. But unless the commercial financing environment evolves dramatically, and quickly, few new developments will be in a position to take advantage of that upswing. Eighty-five percent of Banker & Tradesman readers said they believe it is either not very likely or not at all likely that lenders will make commercial development loans available at reasonable terms in 2010.

In addition to the stalled Filene’s tower, two other high-profile Hub developments illustrate the harsh lending terms developers will have to navigate in 2010. Boston Properties had to swallow a tough recourse provision to get a club of five lenders to issue a $215 million construction loan for its Russia Wharf office tower in Boston – a project substantially pre-leased to Wellington Management. The loan amounts to less than half the tower’s $550 million construction tab. And when a group of three lenders refinanced the new Center for Life Sciences Boston, Biomed Realty Trust’s Longwood research tower, the San Diego-based REIT had to increase its equity position by $150 million, replacing a $500 million construction loan with a $350 million mortgage.

The Tannery shoe store will open its fourth and largest retail  location at 711 Boylston Street within the next week.  The two story 11,000 square foot location, formerly Restoration Hardware, will showcase the retailer’s largest collection of shoes, clothing and accessories.

The second level of the space will be home to the concept, “Curated at the Tannery,” which will be dedicated to a more youthful, technical and alternative product mix in contrast to the sophisticated, high-end product environment on the street level.

The Tannery is an independent shoe retailer owned by brothers Tarek and Talal Hassan, which has grown substantially since it first opened its doors 35 years ago.  With two locations in Cambridge and one already on Boylston street, this expansion to the Newbury St./Boylston/Back Bay submarket represents a marked changed in Back Bay retail leasing activity.

This opening is a welcome addition to the retail scene in Back Bay.  As of today, the build-out looks to be almost 100% complete as their window displays and inventory are already displayed and apparent through the expansive windows wrapping the corner of Boylston and Exeter Streets.

On behalf of Boston Realty Advisors, we wish the Tannery and its proprietors much success and welcome them to the neighborhood.

To learn more about current leasing opportunities in the greater Boston area, please contact our Retail Leasing Director, Jim Speros.