For decades, the Boston-area office market has largely been split in two. Companies could be in the heart of the city, or out on Route 128.
Now, a growing number of developers are betting that at least some companies would like to be somewhere in the middle.
A wave of office projects are planned or are underway in the outer reaches of Boston and its immediate neighbors. They’re transit-oriented, with rents that are cheaper than downtown’s and access to urban-dwelling young workers. And they’re aimed squarely at companies that need room to grow in a crowded city but don’t want to decamp for the suburbs.
One of the biggest of these projects, Nordblom Co.’s redevelopment of the former Boston Globe headquarters on Morrissey Boulevard in Dorchester, cleared a key hurdle Thursday, when the Boston Planning & Development Agency approved plans to convert the old newspaper plant into a campus for creative office space and light industry.
The 695,000-square-foot building is large enough to house thousands of workers, with huge floor plates that Nordblom is repurposing for technology firms and other companies that like to spread out. Because it’s an existing building — Nordblom bought it from the Globe for $81 million in December — rents can be lower than they are in new buildings.
“It’s a value alternative in a market where new space would cost a lot more,” said Og Hunnewell, executive vice president at Nordblom. “We’re trying to respond to growing companies that can’t find space in the city.”
Likewise, the Boston developer Berkeley Investments is converting an old Bank of America building in Malden Center into Exchange 200, a 315,000-square-foot office building and data center that’s designed for creative-industry and tech tenants. Heavy-duty floors and extra-high ceilings make the building ideal for manufacturing or research and development, said Dan McGrath, a vice president at Berkeley, while its location, steps from the MBTA’s Malden Center Station on the Orange Line, could appeal to companies whose coommuters need good access to transportation.
“These are pretty unique buildings,” McGrath said, referring to 200 Exchange and Nordblom’s Dorchester project. “They’re in the urban ring, on transit, with high ceilings and big floors. That has resulted in a lot of interest.”
They come on the heels of several other “outer-urban” office projects that have landed major tenants.
New Balance’s Boston Landing campus has lured life-science companies that have been priced out of Cambridge, as well as suburban companies that want a presence in the city.
Partners Healthcare chose Assembly Row in Somerville to consolidate into one large office.
The roadside assistance operator Agero recently signed a lease to fill a building under construction in the Wellington section of Medford.
And other projects are in the works in East Boston, the Alewife area of Cambridge, and along the planned Green Line Extension in Somerville.
These locations make a lot of sense, said David Townsend, executive managing director at Newmark Knight Frank, a real estate firm. These days, proximity to a workforce is key, and these are the sort of neighborhoods where Boston’s smart young workforce increasingly lives.
“If you’re a PhD or a postdoc, you probably can’t afford to live in Back Bay, or even South Boston,” Townsend said, as he discussed outer-urban projects at a recent panel talk on the office market. “These neighborhoods are where the employees are, and where companies are going to be near the talent.”
And rents are substantially more reasonable than in downtown. Even for new high-end space, office rents in so-called streetcar suburbs like Brighton, Dorchester, and Somerville are two-thirds, on average, of what they are in the Seaport and a little more than half of the going rate in Kendall Square, according to data from Perry Research.
The combination of talent, space, and lower rents is driving a lot of interest in 200 Exchange, said Carolyn Zern, Berkeley’s vice president for development. The firm is talking with companies ranging from robotics developers to co-working operators and hopes to sign leases before opening early next year.
“We’re thinking this place will be a blend,” Zern said.
Hunnewell is thinking the same for the former Globe site, at 135 Morrissey Blvd. — a mix of companies large and small, across a variety of industries. He believes projects like his are in a sweet spot at a moment when Boston’s office market is changing. Marketing is scheduled to begin soon, with the complex opening in fall 2019.
“We’ve got companies coming in from Route 128, and being pushed out of downtown,” Hunnewell said. “We need to be thinking about it both ways.”