Residential development dominates the current real estate landscape, with builders competing aggressively for sites to construct upscale apartments in locations that were once considered unsuitable for any use.
This trend has created a consequence: industrial zones throughout Greater Boston are contracting or vanishing altogether. Properties in Chelsea’s industrial corridor along Eastern Avenue and Marginal Streets have become increasingly valuable and attractive to developers seeking to acquire industrial land before opportunities disappear.
Chelsea exemplifies this dynamic particularly well. Industrial and commercial properties there have appreciated substantially following several major transactions, and prominent regional developers are moving quickly to secure committed industrial sites.
National Development, a prominent firm with significant Boston investments including the popular Ink Block residential project, acquired 130 Eastern Ave. in August for $10 million from the Cohen Family, according to property records. The purchase is located on Eastern Avenue.
Subject to obtaining a zoning variance, the company intends to demolish the existing 38,000 sq. ft. warehouse occupying the seven-acre parcel.
According to Ted Tye of National Development, construction on the new 32-foot clear height building could commence in late 2017 following final design completion and receipt of all necessary permits and approvals. Fall 2018 is the anticipated completion date.
One tenant has already committed to the new property, Tye noted, though the tenant’s identity remains undisclosed.
“There is an increasing demand in Greater Boston for quality distribution space close to Boston,” Tye stated. “Chelsea is ideally located and has been great to work with on expanding the City’s commercial base.”
City Manager Tom Ambrosino attributed some of this development momentum to Chelsea’s deliberate commitment to maintaining its industrial character—a stance that distinguishes it from communities like Everett’s Lower Broadway area near Wynn Boston Harbor casino, where residential development pressures are intensifying.
“I think we have made a commitment to see industrial areas that are now industrial to remain industrial and that these areas are relatively important to the City,” Ambrosino explained. “We have plenty of areas for residential expansion, including the Forbes site. I think we’re committed to retaining a vibrant industrial district. Chelsea historically has done a great job. We’re not likely to create residential developments in our industrial areas.”
The City requires that new developments improve the area aesthetically, Ambrosino noted. National Development will landscape its completed property, and LTI Limo Company—which relocated to Chelsea’s Eastern Avenue from Everett’s Lower Broadway after being acquired by Wynn—is planning substantial landscaping improvements as well.
“There aren’t a lot of industrial areas in Greater Boston and so this industrial area has become quite desirable,” Ambrosino stated.
Last week brought additional significant activity to the industrial district when Seyon Group, a Boston commercial development firm with three decades of experience, purchased two prominent warehouses.
Seyon Group did not respond to inquiries before publication, but property records—initially reported by Bldup.com—indicate the firm acquired the two warehouses for more than $10 million total last week.
The purchase included 201 Crescent Ave. from New England Lighting Company for $3.75 million. New England Lighting had acquired the warehouse in 2009 for $2.65 million and is now closing operations. The building is currently vacant and available for lease.
In a concurrent transaction, Seyon Group purchased 150 Eastern Ave. from O’Brien Realty for $7.475 million. O’Brien Realty, which also owns 140 Eastern Ave., had acquired 150 Eastern Ave. in 2015 for $4 million—nearly doubling the investment in two years.