Boston Retail: 2013 was Great and 2014 Will Beat It
If 2013 was considered a year of great health in New England retail real estate, we’ll likely need to craft stronger superlatives to describe 2014. Exciting new projects circling metro Boston, rising retailer demand, and a flood of capital chasing retail centers were consistent stories throughout 2013 and will only amplify in 2014.
Surprisingly quiet during the prior decade, grocers are now driving much of the activity and creating the lion’s share of the retail headlines. With Whole Foods inhaling five Food-master stores, opening in Lynnfield and exploring any other site that comes available and with Wegmans committed in the Fenway, set to open in Burlington and Chestnut Hill and construction finally underway in Westwood, stories of supermarket growth were ubiquitous throughout 2013.
The recent announcement of a new Star Market at North Station provides evidence that the new entity behind the Shaw’s chain may have quickly turned around the grocery operator’s downward spiral while the team at Roche Bros. surprised many in the industry with a small store in Medfield and an urban store to join the Millennium Tower project at Downtown Crossing. And Market Basket? Here’s to hoping that 2014 provides a clearer path for the powerhouse local chain and its ongoing development projects.
The Route 9 corridor through Chestnut Hill is a shining example of the Greater Boston retail market’s renewed vigor. WS Development’s The Street project and NED’s Chestnut Hill Square began opening in 2013 and will continue the process this year. Great projects -— with a broad mix of big name retailers and restaurants including Anthropologie, Pottery Barn, Shake Shack, and Del Frisco’s — finally present a face for the retail market that matches the incredible local demographics. Certainly Wegmans’ spring opening will create its own big splash. Now, if only a few retailers with vision could creatively bring life to the Atrium.
We’ll see many more trends continue. Quality restaurants across the spectrum of price points will continue to enter the market in the city and along the Interstate 95 belt, creating vibrancy and driving nearby retail sales.
“Medtail” will be more accepted as a fit with traditional retail as national urgent care retailers battle the major local hospitals to catch new patients in retail environments. And fitness facilities — health clubs, spinning studios, boot camps, boxing clubs, yoga studios and more — will grab any available space that the yogurt craze from 2012 failed to fill.
Urban retail will garner as much attention as the high-profile projects along 128. Back Bay rents will continue to rise and Downtown Crossing will begin to take shape as the hole in the ground gets filled and Faneuil Hall re-tenanting gains traction. Assembly Square will draw attention throughout the year as this long-awaited mixed-use transit-oriented project finally comes to fruition this year, bringing an eclectic mix of outlets, restaurants and entertainment uses to Somerville.
Finally, by the time you are reading this, Kimco Realty will have closed on the largest retail sale in New England in more than five years, the 24 properties of the Bollard Group portfolio. This is the perfect “curtain puller” for retail sales in 2014, likely a threshold-setting year for acquisitions.
— By Ben Starr, Partner, Atlantic Retail Properties. This article first appeared in the January/February 2014 issue of Northeast Real Estate Business magazine.