By Catherine Carlock – Real Estate Editor, Boston Business Journal
Apr 4, 2017, 2:41pm
For the six years that The Davis Cos. owned the sprawling Design Center, the firm had a window on the adjacent office and warehouse complex at 88 Black Falcon Ave. Now, over a decade after selling off what’s now called the Innovation & Design Building, the Boston-based real estate development firm is buying back into the thriving Seaport District with a $60 million acquisition of the 88 Black Falcon complex.
The low-rise complex spans a combined 376,000 square feet, about evenly split between office and warehouse/R&D space, at the far edge of the Raymond L. Flynn Marine Park. Davis Cos. acquired 88 Black Falcon Ave. from Prologis Inc. (NYSE: PLD), a San Francisco-based industrial real estate firm, and extended the site’s long-term ground lease with the Massachusetts Port Authority. A Suffolk County assignment of lease document values the deal at $60 million.
Davis Cos. plans to put “tens of millions of dollars into the property,” said CEO Jon Davis, and has tasked architecture firm Dyer Brown with creating a warm industrial aesthetic. Planned improvements include bolstering 88 Black Falcon’s structural underpinnings, adding WiFi throughout the property, and creating a bike storage area and fitness facility. Davis aims to complete work by the second quarter of 2018.
“It’s one of the most exciting innovation areas in the whole country,” Davis said in an interview with the Business Journal. “When we owned the Design Center between 1999 and 2006, this really was the outer edge of the market. Frankly, it was difficult to get tenants to go out there. But today it’s becoming this incredibly exciting, very young, very energetic, mixed-use environment, and you’ve got a very wide array of knowledge-oriented companies moving out there.”
The property is 94 percent leased to tenants including self-driving car startup Optimus Ride and general contractor Lee Kennedy Co.
“This is a great resolution to a complicated situation,” a Massport spokesperson said by email. “We are pleased to work with The Davis Cos. and their vision for the property going forward. It’s an important location in the working port, situated next to the Cruiseport and across from the Conley Terminal.”