Boston’s Biggest Developments
David Bates / March 7, 2014-1:46 pm
A standing-room-only crowd packed NAIOP’s “Big is Back” presentation this past Wednesday. The crowd listened as a four-member panel of development pros, intimately involved in several of Boston’s most ambitious and complex development projects, discussed the projects and the current state of the market.
Perhaps, the most interesting speaker was Richard L. Friedman, the President and CEO of Carpenter & Company and one of the perennial all-stars of the Boston development scene. Friedman started developing hotels in the 1970’s and over the years has taken on some of the most challenging projects in the most desirable locations. Such projects have included the Charles Hotel in Harvard Square, the Liberty Hotel in Beacon Hill, and the Hilton at Logan Airport. Friedman is in the process of developing One Dalton Street in Back Bay, which will include a 58-story tower, complete with a five-star hotel and 160 luxury condominiums, and a 25-story luxury apartment building (to be owned by the Pritzker Realty Group). He estimated the project will cost $700 million to complete.
Asked what makes the project viable now, Friedman immediately discussed the interest foreigners have in the city. “It’s mind blowing how much people are excited about Boston,” he said, and then recounted meetings with the investors from the Middle East, Turkey, and the United Kingdom all of who were anxious to invest in Boston. Friedman said that he also met with China’s largest construction company and they are preparing to invest “billions and billions of dollars” in San Francisco, New York and Boston. He added, “The world is in lots of turmoil and people want to invest in cities and countries where they think there is a great future and Boston has become one of those places.”
Friedman also provided some economic insights to the Dalton Street project, explaining that big hotels are generally uneconomical to build in the short-term, but good long-term holds. He said, ”A five star hotel today will cost more or less a million dollars a key.” As a result of the immense cost of building a hotel, developers typically subsidize the project by selling luxury condominiums at the site and use the profits from condominium sales to help cover the cost of the hotel development. How expensive will the 160 condominiums be at One Dalton? “We are going to build a project that which will be priced at a higher level than anything that has ever been built in the city,” Friedman said.