Approximately 70 percent of the retail space is leased in the One Seaport Square development scheduled to open next year.
Can a developer from Newton known for building suburban shopping centers give Boston’s Seaport District a soul, or just a SoulCycle?
Much of the future flavors and feel of Boston’s fastest-growing neighborhood will be determined by decisions made by WS Development. What tenants it selects to fill nearly 1 million square feet of retail space on the lower floors of new towers, and in what order it builds offices, hotels and housing to cover a 12.5-acre expanse of parking lots, will set the tone for street life in the coming years.
Chestnut Hill-based WS Development has assembled a portfolio of 20 million square feet, mainly by building and buying lifestyle centers and big-box developments in Boston suburbs and New England small towns. As it approaches its most urban landscape, it’s taking a different approach tailor-made for the neighborhood, with an emphasis on fashion and food venues, said Brian Sciera, a WS vice president.
“We curate a mix that makes sense for a district or a property,” Sciera said. “We create compelling places and compelling shopping districts.”
WS is in the final third of negotiations for 250,000 square feet of shops and restaurants on the bottom three floors of One Seaport Square. Two luxury apartment towers are rising above a 3-story retail podium in the 1.5-million-square-foot development on Seaport Boulevard. WS has an option to buy 125,000 square feet of retail condominiums beneath 733 apartments and condos on parcels M1 and M2 on Pier 4 Boulevard, in an $800 million development set to break ground this fall. And it has permits in hand for another 500,000 square feet of retail space on the lower floors of office buildings, hotels and residential towers on a 12.5-acre site off Congress Street.
“In the past, inventory has always been the biggest issue in our market: the lack of development in Boston on the retail side,” said Peter Montesanto, senior vice president of retail leasing for Colliers International in Boston. “Recently there’s been more development in our region than in the last 25 years, so it’ll be a little bit of a new frontier.”
Although 70 percent of the 250,000 square feet in One Seaport is leased, only a handful of tenants have been announced so far, including Equinox fitness club, ShowPlace ICON Theater, Kings nightclub and SoulCycle.
Most of the remaining space is located on the ground floor, Sciera said. Many of those spaces will be filled with clothing boutiques, shoe stores and outerwear retailers, he said. WS is approaching the Seaport leasing differently than a suburban center, where tenants often request lease restrictions barring competitors in the same merchandise categories.
“This is urban core,’ he said. “These are city streets, so we won’t be giving tenants carved-out uses. Certainly, some uses will be duplicated.”
And yes, Sciera is confident about the prospects for a grocery store, probably located in one of the “L block” parcels on the northern side of Congress Street.
The Evolution Of Retail
Cofounded in 1990 by Jeremy Sclar and Stephen Weiner, WS embraced the lifestyle center model for retail development in the waning days of the pre-Amazon era. It built outdoor shopping centers in rural-turning-suburban towns like Wareham, combining Main Street-facades with mall-style parking lots and populating them with big-box tenants like Kohl’s and Petco. In the previous decade WS found a strong anchor partner in Whole Foods Market, which was looking for prime sites to expand in Massachusetts, and signed on to anchor WS projects such as Hingham’s Derby Street Shoppes and Dedham’s Legacy Place.
The 675,000-square-foot Dedham development nailed down most of its leases in 2007 and opened in 2009. After the recession and the rise of online shopping, a new model was needed to drive retail development.
So when Newton-based National Development was looking for a strong retail partner to resuscitate its stalled MarketStreet Lynnfield development in 2009, it added WS Development as a new partner. Acknowledging the decline of traditional anchor stores, WS pursued a leasing strategy fit for the foodie era, setting aside 17 out of 50 tenant spaces in the first phase for restaurants and cafes. Local names such as Davio’s and Legal Sea Foods’ casual C Bar concept signed on, along with Patrick Lyons’ Kings nightclub.
At The Street in Chestnut Hill, WS Development added a strong independent flavor, with nearly half of the 42 tenants under local ownership.
Fallon Co., with its Twenty Two Liberty condos at the Fan Pier selling for $2,000 or more per foot, has sought high-profile operators such as Mario Batali’s Babbo pizzeria to match its upper-crust clientele in the Seaport. It’s been patient, letting some ground-floor spaces sit vacant for more than two years before selecting a tenant.
Fallon last week announced the pending arrival of four new tenants, including New England’s first Mastro’s Ocean Club, a 9,200-square-foot seafood restaurant at Twenty Two Liberty, and Frank Anthony’s Gourmet Market, an Italian deli and grocery store affiliated with the owner of Going Bananas Marketplace in the North End.
“We are lacking boutique grocery in the immediate submarket and it was very appealing to the tenant, because of the built-in density of the luxury residential and office,” said Andrea DeSimone, first vice president of retail services for CBRE Boston, which represents Fallon Co. “Being on the pier is an exciting opportunity because people can come off the boats, as well as the Harborwalk. The discerning clientele here will be very pleased with him.”
Other new arrivals are no strangers to downtown. Sorelle bakery, which has signed a 1,200-square-foot lease at Fallon’s100 Northern Ave. office tower, has a location at Atlantic Wharf, just across the Fort Point Channel.
Residential Lays Groundwork For Retail
Office buildings quickly leased by global leaders such as Vertex and PwC set the tone for the first stage of the Seaport building boom, while residential development lagged coming out of the recession.
As large apartment complexes such as the 832-unit Via and Benjamin apartment complexes at One Seaport Square approach completion next year, they’ll give the neighborhood a 24-7 population that will enhance the shopper base. But developers also need destination tenants that will lure visitors over the bridges from downtown.
A possible guide to WS’s balancing act is reflected in the mix of ubiquitous national chains and fledgling indie operators who will fill its ground-floor retail condo at 101 Seaport, Skanska’s 17-story office tower anchored by PwC. WS quoted rents topping $100 per foot for the storefronts, according to an industry source, in a neighborhood that had never seen triple-digit rents before.
Starbucks leased a prime storefront facing Seaport Boulevard, along with Chipotle and cult burger favorite Shake Shack. The latter is a carryover from The Street in Chestnut Hill, where WS reached out to the New York chain and pitched the 400,000-square-foot center for its first New England restaurant.
“As long as they’re good operators with good food, we like both national and local,” Sciera said. “Obviously, Starbucks is a tried-and-true operator and Shake Shack everyone knows, but we like the local operators as well.”
Independent operators include Acetuna Mediterranean Grill, which has operated a café in Kendall Square for a decade, and Tikkaway Grill, an Indian quick-service concept with two locations in New Haven, Connecticut.
Gopinath Nair, Tikkaway Grill’s founder, said he was shocked when WS President Jeremy Sclar arrived at his restaurant unannounced to check out his operation.
“They are invested in the small player like me, and that says a lot when the landlord comes in,” he said. “They are sophisticated and smart and experienced, and I would like to go into other spaces with WS. I’m looking for a relationship here. It’s not a one-off.”
