Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
Issue link: https://sct.epubxp.com/i/528948
O N T H E G R O U N D : B O s T O N Grocery stores: From famine to feast Boston might be known as Beantown, but those living in its downtown area were find- ing relatively few places to buy any beans. As in some other densely populated older cities, supermarkets there were few. Post- recession, this has changed. The expanding biotech and medical industries have begun pushing into Boston's urban core, and there has been a corresponding inward migration of Millennials and empty nesters. There has been a lot of new development — from office buildings to multifamily towers — in much of which new retail space is being showcased, and this includes supermarkets. Two of the largest projects under way are the so-called Ink Block (the former Boston Herald build- ing) in the South End, and the Millennium Tower, in the financial district. Whole Foods occupies 50,000 square feet of the Ink Block, and a Roche Bros. supermarket ac- counts for a 25,000-square-foot space in the Millennium Tower. "If retailers want to keep growing and hit the Millennials, they need to figure out how to get into the urban environment," said Kevin Higgins, a Boston-based CBRE senior vice president and principal, pointing to the open- ing of the upscale Roche Bros. grocery store. "It was the company's first foray in an urban environment, and it has been wildly success- ful," Higgins said. "There isn't another grocery store for a mile and a half in any direction." Wegmans is moving into the Fenway– Longwood medical area, while Stop & Shop is opening additional stores throughout Boston. And Star Market is leasing space at Boston Properties' North Station project, Higgins says. "That would serve the North End of Boston and north end of the financial district," said Higgins. "That won't open until 2017, 2018." Before all this, Boston was under- retailed, and not only as concerns super- markets, says Geoff Millerd, a Cushman & Wakefield executive vice president in Bos- ton. "That's why a place like South Bay Cen- ter, developed by Edens, did well," Millerd said. "Target is open 24 hours, Home Depot is open 24 hours. Stop & Shop did incred- ible numbers — it is one of the company's top stores in New England." Meanwhile, downtown Boston is filling empty spaces with international brands like H&M; and Zara, as well as old favorites such as Nordstrom Rack and Athleta. Restau- rants across different categories are focus- ing on Boston too, as are celebrity chefs, notes Andrea DeSimone, vice president of retail sales at CBRE. "We just opened Mario Batali's Babbo Pizzeria," said DeSimone. "Top restaurant volumes in Boston are at Liberty Wharf — home to Del Frisco's Dou- ble Eagle Steakhouse, Temazcal Tequila Cantina and Legal Sea Foods." The problem for restaurants and other retail concepts is that Boston is an extremely tight market — the overall oc- cupancy rate is about 95 percent. Rents have been escalating since 2010. Newbury Street has the highest rents in the city: Re- portedly, a space of about 2,000 to 4,000 square feet on Newbury could go for nearly $300 per square foot. "Five years ago it might have been around $100 to $120 a square foot," said Higgins. But two things are making a difference: Some stores are adapting to the two-story format, and de- velopers are re-imagining unused ground- floor space. "Developers are trying to get creative about activating their first two floors that don't have retail," said Higgins. "A lot of tow- ers built in the 1970s don't have retail. They are even activating the back wall of the Bos- ton Public Library into two retail spaces." — Steve Bergsman 52 s C T / J u L y 2 0 1 5 "If retailers want to keep growing and hit the Millennials, they need to figure out how to get into the urban environment."