Here's the latest installment of Bates By the Numbers, a weekly feature by Boston real estate agent David Bates that drills down into the Hub's housing market to uncover those trends you would not otherwise see. Check out his ebook, Context: Nine Key Condo Markets.
On Tuesday, an audience of 400 area real estate industry professionals, architects, developers, and trade contractors listened to a panel of experts discuss the conditions of one of the hottest real estate markets in the country: Cambridge. The event, "Cambridge: The New 24/7 Hub," was sponsored by NAIOP, the Commercial Real Estate Development Association.
The panel focused primarily on happenings in Kendall Square, a location which encompasses only about one square mile and yet has in the last twenty-five years added millions of square feet of office space, 3,000 residences, and more than 40 restaurants. Today, as leading universities provide one of the most enviable technical talent pools in the world, Kendall Square has been attracting a bevvy of the country's most successful corporations. As a result, the real estate market there is hotter than ever.
"Innovation is the goose that lays the golden egg," said Steve Marsh, managing director of real estate for MIT, explaining the area's spectacular success as he described the university's efforts to spur innovation by teaming with third-party tenants such as Novartis on some of their properties.
Among other topics, the panel discussed the challenges of urbanization, creating infrastructure, and putting up lab space, which is typically loud, near residential areas. While there was some sensitivity to keeping a balance between academic, business and residential goals in the area, I was thinking that it may be challenging for residential development to keep pace in Cambridge.
Alex Twining of Twining Properties noted that the commercial boom in the area meant that residential projects get out-bid. Additionally, Rob Dickey of Leggatt McCall, whose firm is involved in the redevelopment of the Edward J. Sullivan Courthouse in East Cambridge, said that neighbors in that area concerned about parking voiced a preference for a commercial use for the 22-story former courthouse over a residential one. As a result, the current redevelopment plan calls for 460,000 square feet of office, but just 24 residential units.
One presenter I spoke with estimated that there may be as many as 5,000 residential units in Cambridge's pipeline (apartments, dorms, condos, etc). But is it enough? In a market that is selling nearly as many condominiums as it lists (2013: 826 sales, 847 listings), I'm skeptical.
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