Business & Tech

Chesto Means Business

CommonWealth Kitchen’s dilemma underscores problem for Boston’s industrial tenants

Jen Faigel runs CommonWealth Kitchen, a shared cooking space that has helped hatch more than 50 food startups in the past five years.
Lane Turner/Globe Staff/File
Jen Faigel runs CommonWealth Kitchen, a shared cooking space that has helped hatch more than 50 food startups in the past five years.

Jen Faigel is finding out just how tough it can be to control your destiny if you need industrial space in Boston.

Faigel runs CommonWealth Kitchen, a beloved incubator that has helped hatch more than 50 food startups in the past five years. It also doubles as a food manufacturer for some of the city’s biggest institutions. But the nonprofit is a tenant in its Dorchester property, a converted meatpacking plant known as the Pearl building. And the rent was due to rise by nearly 25 percent this month.

The existing rent of $28 per square foot — about $400,000 a year — has been rough enough for a nonprofit on a $2.4 million budget. Faigel is negotiating a short-term freeze, to buy her time. But she sees only two viable long-term options: acquiring the site and expanding the building to accommodate future growth, or moving to a new place.

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The first option isn’t a sure thing, although city officials are helping referee talks between CommonWealth Kitchen and the site’s majority owner, the Dorchester Bay Economic Development Corp.

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The second option? Well, Faigel had no idea how difficult that would turn out to be.

Industrial land disappears every year in Boston, and the competition gets fiercer for what remains. Faigel is considering joining forces with City Fresh Foods, a business that provides healthy meals to local schools. Even with a partner, making the numbers work can be a challenge within the city borders. Affordable properties still can be found in places such as Woburn or Brockton. But many of CommonWealth Kitchen’s food startups, including truck operators that peddle downtown, need to be in Boston — and many of the 100-plus people who work there also live nearby.

CommonWealth Kitchen’s story is playing out time and again across the city, according to Greg Klemmer, a broker with Colliers who specializes in industrial deals. Everyone, Klemmer says, seems to be fighting for the same kind of space. The intense demand has roughly doubled the value of industrial land in and around the city during the past three years, he says. In many cases, values have gone much higher.

The biggest transformations can be seen in former industrial areas in the South End and South Boston — thanks in part to market forces and the rezoning efforts that helped them along. Block by block, warehouses are being replaced by apartment buildings.

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The old Boston Herald plant is now a Whole Foods and luxury housing. The Abbey Group is converting the Flower Exchange site to a $1 billion office and lab complex; many of the flower vendors have moved to Chelsea. Gillette is staying put, but developers are starting to nibble away pieces of its Southie manufacturing campus.

Then there are the Widett Circle food wholesalers. They seem close to selling their nearly 20 acres, hard by the Southeast Expressway. The site became a potential pot of gold after it was picked for the central stadium in Boston’s failed Olympics bid. Developers came knocking. But the food processors have struggled to find a new home within the city. It’s possible that some, or all, may need to leave. That means up to 800 jobs could go with them.

Sure, Boston stands to gain when new apartments, offices, and labs sprout out of shabby old industrial properties: more workers to feed the tech economy, maybe, or more taxes for the city’s coffers. But Boston loses something important, too.

Jon Chesto can be reached at jon.chesto@globe.com. Follow him on Twitter @jonchesto.