THE FUTURE IS NOW Malden Tests Office Market Growth Will Multifamily Boom Lay Groundwork for Job Cluster?
By Steve Adams | Banker & Tradesman Staff | Apr 1, 2018
An Assembly Row-style apartment and retail development is rising in Malden Center where an imposing government center complex had blocked the path into downtown.
A partnership between the city and Jefferson Apartment Group reshapes the view greeting 12,000 daily commuters from the MBTA station, part of a strategy to capitalize on one of the region’s top transit-oriented development sites. More than 800 apartments have been built in the downtown since 2014 and 325 more are opening next year at Jefferson’s 3.4-acre site.
The next step for Malden: testing the conditions for more office development on the Orange Line corridor north of Boston.
“Historically, Malden has always been a back office location but I see the tenants becoming more tech-related,” said Phil Giunta, an executive managing director at Newmark Knight Frank. “The real driver for those tech tenants is they need access to the employee base that lives and breathes in the urban edge market.”
In a sign of lenders’ confidence in the Malden office market, Malden-based Combined Properties is nearing completion of a 55,231-square-foot speculative office building at 295 Canal St. East Boston Savings Bank provided $14.8 million in construction financing for the 5-story building, built at the former Acme Canvas factory property which had sat vacant for two decades. 295 Canal has 45,000 square feet available.
In Malden Center, Boston-based Berkeley Investments is turning the catacombs of a former bank operations center at 200 Exchange St. into nearly 300,000 square feet of open-format commercial space. Newmark Knight Frank and JLL are marketing 200 Exchange as a potential landing spot for tech companies, back offices and even light industrial uses for medical research or robotics firms.
“It’ll be interesting to see in terms of the commercial market here what companies will find their way to 295 Canal and 200 Exchange,” said Deborah Burke, executive director of the Malden Redevelopment Authority. “There’s been a lot of focus on residential growth here which has been positive. Now the discussion seems to be a desire to support endeavors that bring jobs.”
Apartment Boom Laid Groundwork
The former Malden city hall has relocated to temporary offices in the downtown while Jefferson Apartment Group proceeds with construction of its 325-unit apartment complex and a 44,500-square-foot office condo for the new city hall. Both are scheduled for completion in spring 2019. The old city hall was demolished last summer.
“To remove the building and creating a view corridor down Pleasant Street was really a transformative moment for many people,” said Sandi Silk, senior vice president at Jefferson Apartment Group. “It’s enabling people to see the future.”
It’s not just downtown that’s in transition. Two more craft breweries are moving to properties along the Commercial Street corridor, a swath of industrial property between Malden Center and Wellington Circle that’s being studied for potential rezoning.
Idle Hands Craft Brewing moved its brewery and taproom to 89 Commercial St. after being displaced from its previous Everett home by the Wynn Boston Harbor casino. And Chelsea-based Mystic Brewery leased a 16,500-square-foot building at 11 Charles St. for a new taproom and production facility in February.
“Mystic Brewery wanted more visibility and they saw what was happening with all of the retail and residential development close to the T station,” said Steve Nohrden, executive vice president at Malden-based Burgess Properties, which represented ownership.
And most recently, a brewpub named Faces announced plans to open at 50 Pleasant St.
Demand for industrial properties in Malden is high, although many owners are slow to recognize their potential value, Nohrden said.
“Most of the deals are off-market. I’m hounding owners to sell and I have 10 buyers for every seller,” he said.
Retail Market in Transition
Affordable rents and Malden’s sizeable immigrant population make for a multicultural mosaic of downtown storefronts. Ethiopian restaurants, halal grocers and Vietnamese tax preparation firms sit side-by-side with salons, dollar stores and studios offering up lessons in salsa and Angolan dance.
Recent arrivals hint at a potential transformation. Swedish adventure room franchise Boda Borg and 8D Room Escape have opened in recent years, and new multifamily and office developments are targeting upscale retailers and cafes to fill out their ground floors.
200 Exchange has 16,000 square feet of retail available for occupancy in 2019 on the ground floors, said Pat Paladino, a senior managing director at Newmark Knight Frank.
Jefferson Apartment Group has hired Boston-based retail brokerage Graffito SP to market its own 22,000-square-foot retail component. Graffito SP has worked with the developers of Boston Landing and Somerville’s Union Square to recruit distinctive shops and restaurants.
Designs reflected the importance of offering unique retail spaces for the project, Silk said. Ceiling heights range from 12 feet to 20 feet, in a strategy to attract the right mix of tenants.
“It’s a different approach,” she said. “A lot of multifamily developments design the retail after everything else, but we engaged Graffito early on in the design to make sure we were delivering the retail that we wanted as opposed to delivering spaces that were just left over.”