Low supply and high demand continue to define Boston’s multifamily housing market. With a finite amount of available land, adaptive reuse is becoming an increasingly popular way to bring new multifamily inventory to market at a time where the appetite for apartment housing – be it workforce level or luxury – seems nearly insatiable.
According to U.S. Census data, Boston’s population grew by 11 percent from 2010 to 2017. Research commissioned by the National Apartment Association (NAA) and National Multifamily Housing Council (NMHC) in 2017, and conducted by Hoyt Advisory Services, found that Boston would need to add 69,000 new housing units by 2030 in order to meet demand.
And, the city was also recently ranked by U.S. News & World Report as the 27th best place to live among the 125 largest metros in the U.S., which stands to further increase housing demand.
While undoubtedly growing in popularity, adaptive reuse in Boston is nothing new. What was originally a HP Hood milk processing plant in the early 1900s started its transformation into a tech hub in 2013 and space that held maritime cargo at Commonwealth Pier in the early 1900s is now The Seaport Place campus and home to more than 1 million square feet of office space.
The range of assets available to investors considering an adaptive reuse project in Greater Boston varies widely. In just the last year we’ve seen office space in Allston converted into a state-of-the-art car dealership and a vacant church transformed into modern residential units. The historic Boston Gas Company building is now home to luxury apartments with a first floor restaurant, Boston’s Innovation and Design Building was once a military warehouse, and a portion of Boston’s Commonwealth Pier will soon be reimagined as a more than 680,000 square foot mixed-use project featuring office and event spaces, as well as retail, restaurants and vibrant outdoor spaces.
Northeast PCG recently sold Union Street Redevelopment, a mill in commuter-friendly Downtown Attleboro that is slated for conversion into multifamily units.
“For investors who understand the upside of buying a vacant building and converting it into multifamily housing, there is significant opportunity to enhance their portfolio.” Northeast PCG’s Tim McGeary said. “With high single-family housing prices in Greater Boston, a growing technology sector and multigenerational demand for walkable communities, the fundamentals to sustain high demand for multifamily units – and the conditions to command top asking rents – are firmly in place.”
For investors considering an adaptive reuse project in Greater Boston, Northeast PCG is currently offering:
- Fremont Street Development in Winthrop, Mass., a mixed use building slated to begin reconstruction in 2019. The property will house ground floor office space with multifamily units on the two upper levels. Investors also have the opportunity to secure a variance to add a fourth floor and additional multifamily units.
“Both the Union and Fremont properties are prime examples of converting obsolete assets into properties that will generate high tenant demand,” McGearys added. “In the competitive Greater Boston market, vacant properties with the capacity to become multifamily housing are investments that will yield strong returns.”