Stores at the Front: Everything is on the Table With Unused Commercial Buildings

As more and more companies decide they don’t need office space in the Back Bay or downtown areas, several City and neighborhood leaders are warning of an impending commercial real estate crisis – particularly in the Back Bay.

With that in mind, Councilor Michelle Wu said in a neighborhood roundtable that all ideas should be on the table, including converting commercial space into housing, school space and other necessities that have arisen out of COVID-19.

“Because we are in a second surge in this pandemic, I think we have an opportunity and obligation to be very creative from the public sector in this moment of economic crisis that is spinning off of this public health crisis,” she said. “As more and more companies are announcing they will not return to downtown office buildings – LogMeIn was the most recent to say they won’t need that commercial space – we should turn this potential impending crisis in the commercial real estate market as a chance to repurpose some new climate resilience beautiful buildings as housing. We should think if there’s an opportunity for students to be incorporated into some of these spaces – to renovate and fix up and free up some of these spaces for housing that is badly needed across the city.”

Many companies are expected to use far less commercial space in the coming months and years. Wayfair in the Back Bay has seemed to back off their leasing interests. LogMeIn was located in the Fort Point Channel, and said they will only use a fraction of what they did in the past – the 220,000 sq. ft. headquarters. Company leaders have said they expect only about 5 percent of their workforce to come into the office five days a week. That has come about as many companies have found great success in having some workers stay remote – increasing productivity, improving work/life balance and potentially saving money on building leases.

That is a trend that could catch on many places in the Back Bay and Fenway in particular. However, NABB Chair Elliott Laffer said he doesn’t see the office and commercial market completely deteriorating – particularly the large towers and major landlords. That said, he also said there could definitely be some transition on Newbury Street and Boylston Street, in particular.

“I believe the large landlord people believe the office market is still there and I think people need to work in the presence of other people,” he said.

“I don’t think Boston Properties (Prudential Tower) have walked about form their plans for the office building over by Back Bay Station. Druker has been active in the last couple of months with their building at the Shreve, Crump and Low site. The point is it hasn’t been dead. There is stuff going on and people like them believe there will be an office market.”

However, he also said there could very well be some transition from retail and office uses at places like Newbury Street or Boylston Street. He said Newbury Street was originally residential, but transitioned to retail all the way down over time. That was expanded when professionals sought out office space in Boston above the retail stores, which they preferred. Meanwhile, the cited that the original plan for Boylston Street was to be mostly residential.

He said he addressed this at the NABB Annual meeting, and they have been talking a great deal about any sort of post-COVID commercial transitions.

“We’ve talked about all of us putting our heads together and coming up with an ideal and what that might look like,” he said. “Then, what policies would need to be in place to approach that ideal?”

If some of the commercial property were transitioned, Laffer said NABB would support more of that space being dedicated to affordable housing – as Wu suggested.

“It may produce something we really need in the Back Bay and that is affordable housing,” he said. “NABB has been on record supporting on-site affordable housing for a long time…To the extent we could get some affordable housing in the neighborhood, I think we would be supportive of that and it’s something to look at.”

Wu said she isn’t looking at specific buildings or sites, but believes a creative approach could solve several problems at once.

Everything should be on the table as we’re going through these multiple crises,” she said. “In this time of crisis we can’t sit by and react to various announcements from various companies or different waves of the crisis. We really have to be intentional about putting forward creative ideas. Some of it might work and some of it might not work, but there’s a need to solve multiple of these crises at once, and protect our housing in addition to protecting people on the public health side and think of our transit problems.”

Wu elaborated that she has talked with real estate professionals about what the City could do and what it might look like in the market if multiple companies didn’t come back – or didn’t come back fully – to occupy their leases. That again led her to talk about solving multiple problems with one solution, such as using a vacant building to house Boston Public School students, or affordable housing partnerships.

“In certain cases there might be a building that makes sense for some partnership around affordable housing,” she said. “I think everything has to be on the table and we can’t talk about all these issues in silos. Our housing only through DND and schools through BPS. We need space in a pandemic and need to stabilize everyone and many of those things could happen in coordination if we have a big picture plan.”

Laffer said he can think of several buildings in the Back Bay with giant question marks above them – including the Hynes Convention Center, which likely won’t host a convention for months to come, and its potential sale is now questionable in this new market.

Yet another, he said, is the Lord & Taylors store on Boylston Street. In late August, the company announced they would close the anchor Prudential Mall store on Boylston Street – leaving a giant hole in the commercial landscape. Laffer said that is the most interesting option that he sees in the neighborhood.

“The most interesting question is the Back Bay Lord & Taylor and what will happen to it,” he said. “It is part of the Prudential Center and it’s a big site…It’s a 1960s suburban department store sitting on Boylston Street and isn’t the most architecturally appropriate thing to see there. It will be very interesting to see what Boston Properties has in mind there.”

In all, Laffer said he is optimistic about what may come out of the reorganization of the city post-COVID – noting that some things we never expected to stick will stay around, and other things we think are here to stay might fizzle out.

“If we can get everyone to sit down, I think we have the real potential to put wise heads together and have some good come out of this very difficult situation we’re all dealing with,” he said. “Sometimes it takes a difficult situation to make things possible that wouldn’t be possible otherwise.”

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