The renovation of a former powerhouse building at 510 Rutherford Ave. at the Hood Business Park in Charlestown will yield 35,000 square feet of speculative office space upon its completion in February.
The real estate climate may have soured a bit lately, but that has done little to dampen enthusiasm at Hood Business Park in Charlestown, as witnessed by a strong turnout of real estate brokers to the property’s open house earlier this month. Several dozen professionals were on hand for the event, at which the development team unveiled a $160 million expansion plan that is already underway.
We’re excited, Nordic Properties President Ogden Hunnewell said last week of the industry response. It seems like the park has become a very viable alternative in this market.
Once occupied entirely by Hood Milk, the 19-acre parcel is now being converted into a multi-tenanted commercial development. Nordic Properties joined forces with Hood’s owners three years ago to launch the first phase of the project, which entailed renovation of 500 Rutherford Ave. into 309,000 square feet of first-class office space. With that phase now successfully built out and occupied by a diverse tenant base, the developers have turned their attention to renovating additional properties at what eventually will be a 1.2 million-square-foot complex.
Under the recently approved master plan, Nordic will renovate three properties and develop three new structures, two with 220,000 square feet and the third featuring 100,000 square feet. There will also be new walkways and landscaping, enhancements to the telecommunications network and structured parking for 1,600 vehicles.
Hunnewell described Nordic’s initial foray into the Hood project as pioneering, adding that a lack of interest at the outset seemed to underscore the market’s wariness toward the location. We were an invisible project at first, he said. That changed when tenants began seeking financial alternatives to rising rents in downtown Boston and Cambridge and soon discovered what Nordic recognized early on: that being a location just minutes from the Hub’s Financial District and Cambridge’s Kendall Square is an attractive feature. There is also quick access onto Interstate 93 and the Tobin Bridge, while Logan International Airport is also a short distance away.
‘Meaningful Change’
Interestingly, the Hood project ultimately became a victim of its own success, with the first phase quickly occupied. The developers then pushed forward with the expansion proposal, spending the past year finalizing plans with the Boston Redevelopment Authority. Although Hunnewell praised the city for its assistance, the approval process came just as the market was nearing its peak. Hunnewell admits that situation was frustrating given that plenty of tenants wanted to lease space, but they were unable to do so because the project was in permit limbo for some time.
Hunnewell said the open house was seen as a way to kick-start the latest phase and to let brokers know that there are opportunities again to do deals at the park. Nordic has already begun renovation of a former powerhouse building at 510 Rutherford Ave., one that will soon yield 35,000 square feet of speculative space. It should be ready for occupancy by February.
Although it might seem a bit risky to do speculative construction at this time, Hunnewell said the amount was considered manageable in relation to the overall size of the park. It also should help in marketing the complex, he said, given that the powerhouse site can be seen prominently from I-93. Nordic is also developing a new park that will wrap around the building, adding to the aesthetic improvements.
Spaulding & Slye Colliers has been retained as exclusive leasing agents of Hood Business Park, with Senior Vice President David A. Martel and principal Debra J. Gould tabbed to handle the assignment. Martel cited a variety of drawing cards for the property, including its expansion capacity, on-site amenities and competitive leasing rates. Tenant services include a fitness center, cafeteria, bank and on-site parking for 1,800 vehicles.
Hood Business Park has positioned itself as a lower-priced alternative to downtown Boston, but Hunnewell said Nordic has staggered the expansion so that it does not have to accept a deal that does not make fiscal sense. Each expansion property stands alone, he noted, offering greater flexibility as the development proceeds.
Mimicking conditions throughout the market, activity was slow at Hood Business Park for most of the autumn, but Hunnewell said momentum does appear to be on the rise, with more frequent tenant visits, as well as the presence of decision-makers on those tours. That’s a meaningful change, he said. We’re seeing a lot more CFOs and CEOs coming out. The broker event was also encouraging, he said, adding that the progress being made at the park seemed to take some visitors by surprise.
We’re pleased to see the reaction we’ve been getting, Hunnewell said. Based on the interest, Nordic is also pursuing other renovations on the park, with plans to begin overhauling 480 Rutherford Ave. sometime next month. That structure will yield 106,000 square feet of modern space, while a nearby cooler building will also be rehabbed over the near term.
