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Banker & Tradesman
November 8, 2004
Condo Development Flourishes in Receptive City; Area Emerging as Residential Alternative to Hub
One local Realtor describes East Cambridge as the “last frontier” in the city.
But East Cambridge is much more than that. It has become the heated focus of real estate developers with an eye toward large residential projects within downtown Boston’s orbit.
There are several major projects with permits in hand or in the approval process set to break ground within the next year that will generate an entirely new residential community.
“Cambridge has matured as an area,” said Mahmood Malihi, executive vice president of development at Leggat McCall Properties. “The pricing in the city of Boston has become expensive enough that it has made East Cambridge a very viable alternative. Its proximity to the city and its access to public transportation, and there is a regional mall right there … there is a real neighborhood around you. All of those have made it a very viable alternative.”
The largest new residential development in New England – possibly the entire East Coast – called NorthPoint, will begin construction in April 2005. The first phase will consist of two residential buildings containing 335 condominiums and part of a 10-acre green park – connecting to the Charles River park system.
The entire project encompasses a 45-acre parcel with 5.2 million square feet of mixed-use space; there are currently 2,400 permitted units.
The property is owned by Guilford Transportation Industries and the developer is Spaulding & Slye Colliers.
The first completed residences will be marketed to a variety of first-time buyers. Prices will range from $350,000 to $500,000, with the average square footage ranging from 800 to 900 square feet.
Jon Gollinger, president of The Collaborative Cos., leasing agent for NorthPoint, describes the targeted buyers as “no-nonsense purchasers … they don’t want a lot of fluff … they don’t want a lot of razzle-dazzle. They want real efficiency, with the feel of big space.”
The developers are still fine-tuning the floor plan designs. “We are really asking the market what it wants here,” said Gollinger.
Gollinger said he believes one segment of the potential NorthPoint buyers will be renters who never previously considered buying but are enticed by the current low interest rates. A second segment is the high-earning younger renter. Gollinger predicts these renters will buy at NorthPoint because of a lack of quality rental inventory and parity in rental vs. purchase pricing.
Another substantial project potentially slated for East Cambridge is the Charles E. Smith Housing project at 1-25 East St., with permits to construct 767 residential units. A company spokesman would not confirm a date for construction or that the project will go ahead, but said, “Boston is one of our core markets. And we are looking to increase our presence.” The company has done several sizable projects in the Greater Boston area, including Cronin’s Landing in Waltham and residential buildings in Brighton and Quincy.
One First, a residential condo development on the corner of First and Cambridge streets, will contain 199 units within five separate buildings surrounding a courtyard.
Demolition for the site will begin in December with the construction beginning early next year. Construction will be completed in phases; the first will be finished at the end of the first quarter of 2006. The remaining units will be completed within six months of phase one’s completion.
The one-, two- and three-bedroom units will range from 675 square feet to 2,400 square feet. The flats, duplexes and townhouses range in price from $400,000 to $700,000 – with a few marketed for more than $1 million.
“If you want to be in a new building and be in a vibrant location, we think we provide a very good alternative,” stated Malihi, developer of One First along with ING Real Estate Development.
The units are priced at approximately $550 per square foot. According to his figures, comparable residential properties in the South End and the Financial District are commanding $650 to $800 per square foot.
Consistent Vision According to David Pap, senior associate at Coldwell Banker, Huron Avenue in Cambridge, “Buyers who are working in Boston, but are priced out of Boston, find they can get more for their money … their dollars are going to go a lot further in East Cambridge than it will in Beacon Hill or Back Bay.”
The Residences at Kendall Square, a 24-story development with hotel, 15,000-square-foot health club and 321 apartments, has recently begun pre-construction. Located at 350 Third St., the project’s developers are Twining Properties and Principal Real Estate Investors. It is set for completion in 2006.
During 2001, the city of Cambridge adopted several zoning changes that encouraged the current development trend. Some of the influential modifications included allowing residential uses in all areas of the city and easing regulations in the conversion of industrial space to residential use.
According to Beth Rubenstein, assistant city manager for community development in Cambridge, “it created an environment where the city was signaling that residential use is a good thing, that mixed-use is a good thing … so areas would be more lively 24 hours a day.”
Rubenstein recalled the trend beginning in the late 1990s when citizens were applying for down-zoning petitions and the city began to implement recommendations, which led to the citywide Growth Management Advisory Committee process and the 2001 changes.
“What we are seeing is very consistent with the vision that we had,” said Rubenstein.
Cambridge does have an inclusionary zoning ordinance, which applies to any building with 10 or more units and requires a 15 percent share for affordable housing. Although the exact number of units that will eventually hit the market is difficult to accurately predict, even for the permitted projects, Rubenstein considers the number will be a “tremendous contribution” to the affordable housing stock in Cambridge.