In suburban Boston, on a former brownfield site that housed the manufacturing of Ford Motor Co.’s short-lived Edsel automobile, Federal Realty Investment Trust has helped create a successful mixed-use complex of retail, office, multifamily and hotel developments.
The project: The third phase of Assembly Row in Somerville, Massachusetts, furthered the overhaul of the former auto plant site that gave the area its name and closed in the 1950s. The latest wave included 277,000 square feet of office space, 56,000 square feet of retail and 500 residential units at a cost between $465 million and $485 million. At the close of 2021, 248,000 square feet of office space was leased and 162,000 square feet of office space was occupied, all of the apartments in the new residential tower were online, and 23,000 square feet of retail space was open for business, according to Federal Realty. The office building is the North American headquarters of sports apparel firm Puma and will be home to biotech firm Bluebird Bio.
The developer: Federal Realty is a publicly traded real estate investment trust with notable retail and mixed-use properties located primarily in major coastal markets from Boston to Washington, D.C., as well as San Francisco and Los Angeles.
Why it matters: Previous phases of the development have proved successful, and Federal Realty is expecting that trend to continue. The REIT reported this quarter that the initial phase saw its first office lease renewal and expansion at 450 Artisan Way, a 100,000-square-foot building. That rent went from less than $30 a square foot to the mid-$40s. The increase shows the upside that exists for office space in the area. At the new residential building, already 60% of the units are leased at rents 15% higher than the pre-pandemic lease-up rental rates of its sister tower next door, which opened in 2017.
What they’re saying: In a November 2020 analysis of Assembly Row, consulting firm Daedalus Advisory Services emphasized four aspects of the site’s greater economic development over the next decade: a young and highly educated population, public transit access, increasing urban amenities and lower real estate prices than other nearby areas.
What’s next: Federal Realty said any future phases of Assembly Row will be pursued opportunistically based on market conditions, tenant demand and the evaluation of whether they could generate an appropriate financial return.
This story was updated April 12 with new information from Federal Realty.
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