A group of South Boston property owners are in the early stages of planning a mixed-use real estate development on 5 acres at Old Colony and Dorchester avenues.
The owners of the expansive Castle Self Storage facility and several other low-slung storage, car wash, and repair shops at the key junction on the booming Dot Ave corridor have partnered on a financing agreement with Cottonwood Group, a real estate investment firm known for developing the nearly $1 billion EchelonSeaport residential complex.
In a deal that closed last week, Cottonwood will provide $130 million in loans for the South Boston land, to purchase debt, refinance existing mortgages, and provide new acquisition financing for seven parcels, which the owners plan to redevelop into as much as 2 million square feet of housing, offices, life-science facilities, and hospitality or hotel space.
Cottonwood chief executive Alexander Shing said in an interview that the success in leasing and selling at its EchelonSeaport project prompted the Los Angeles-based developer and investor to expand its outlook to other Boston neighborhoods.
“We are so bullish on Boston,” Shing said. “We are betting on the city. And if COVID is any indication, it’s a challenging time for everyone. But it also kind of reaffirms Boston’s place as where the smartest people, the most innovative people, come to live and work.”
It’s Cottonwood’s second deal in the city, following development of the three-building Echelon project with more than 700 apartments and condominiums all atop a retail plaza along Seaport Boulevard. Cottonwood has not been asked to serve as the developer at the South Boston property, a company representative said, nor has the group filed any development plans with the city.
The city in 2016 highlighted the stretch of Dorchester Avenue between the Broadway and Andrew MBTA stations as an area that could house denser, taller buildings, and projects to create them are starting to move forward.
Newton-based National Development recently won approval for its 2 million-square-foot, four-building Iron Works lab and residential complex across Dorchester Avenue from Cottonwood’s site. National has also repurposed the former Cole Hersee manufacturing warehouse at 10-20 Old Colony Ave. into a creative office and retail complex with tenants including Castle Island Brewing, Tatte Bakery, and Freight Farms. Further south, on 9 acres near the Andrew MBTA station, Core Development is moving forward with its On The Dot project, planning four buildings of lab, residential, and other commercial uses.