Fan Pier Developments | Seaport

Equilibria

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A very bluntly-worded PDA amendment from Fallon: They want to do all-res on Parcel H and all-office on Parcel E. Specifically, they want out of the requirement to provide a hotel. I'm not sure how it's possible that the economics don't work on that given the hotel room shortage in Boston, but whatever. The buildings are still going up:

http://www.bostonplans.org/documents/projects/development-project-filings/fan-pier-npc-and-second-pda-amendment

Also buried in there is that Fallon gets hit with financial penalties if civic/cultural space on Parcel H isn't substantially completed by December 31, 2019, and those penalties increase over time. That suggests a design review for Parcel H sometime in 2018, at least.
 

cjbski

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Solid update. Get it done now before the economy takes a turn.

All office for Parcel E seems fine. And more housing on Parcel H sounds fine to me.
 

CSTH

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I'm not sure how it's possible that the economics don't work on that given the hotel room shortage in Boston, but whatever.
Maybe its on the financial markets side of things, rather than the real economy side? i.e. perhaps harder to get optimized financing for a hotel building than for residential (esp. re: tax considerations)

Just a hunch, maybe someone here knows the details...
 

Reznor

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Since 2012, there has been 4 hotels built in the seaport (D Street/Aloft Hotel, Marriott on Congress, Yotel and Envoy).

There's also the massive Omni Hotel and Parcel K both u/c (not to mention nearby South Boston and South End hotel construction).
 

FitchburgLine

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Hopefully the final two parcels are built soon- after that, the entire Seaport above Northern Ave will be built or u/c. Then on to Seaport Square, Massport and the "far" seaport
 

BosDevelop

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Since 2012, there has been 4 hotels built in the seaport (D Street/Aloft Hotel, Marriott on Congress, Yotel and Envoy).

There's also the massive Omni Hotel and Parcel K both u/c (not to mention nearby South Boston and South End hotel construction).

and yet that is still nowhere near enough when 3 star hotels often get $400-$500 a night in Boston.
 

meddlepal

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I can't really figure out what is suppressing hotel construction in Boston. Collusion among the bigger players and city to maintain status quo? Land? Costs > ROI?

It just doesn't make a lot of sense.
 

JumboBuc

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What is "suppressing hotel construction in Boston" is the same thing that's suppressing every other type of construction in Boston. That and opportunity cost: every hotel that you build is a residential or office project that your don't build.

And besides, there has been a decent amount of hotel construction in this area lately (as previous commentors have shown).

Fallon isn't saying that he can't build a hotel and turn a profit. Any time you evaluate an investment, you have to evaluate it in comparison to other investments that you could make instead. If a hotel makes you 10 million bucks but a condo building makes you 12 million, then it doesn't "make economic sense" to build the hotel. I think that's what he's saying here, not that a hotel would be an absolute money loser.

The guy is probably making an absolute killing off of 22 and 50 Liberty. He wants to keep those condo dollars coming, and passing up an opportunity to build another condo project so that he can build a hotel instead doesn't make sense to him.
 

odurandina

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Anyone know what the two parcels are getting/

re: # res units/sq ft, office sq ft?
 

jklo

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I can't really figure out what is suppressing hotel construction in Boston. Collusion among the bigger players and city to maintain status quo? Land? Costs > ROI?

It just doesn't make a lot of sense.
He can make more money renting 'condos' out on AirBnB?
 

Bergeron37

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Hotel construction lending has all but dried up at this point in the cycle and most lenders have too much exposure. There is a lot of new supply coming with the convention center hotel and in order to have a slam-dunk hotel development, you better have a flag from one of the major operators. Problem with the seaport is most of the good flags from good brands are spoken for and no one wants to build a full-service hotel if you don't have to. How many full service Marriott's or Hilton's have you seen built in the last 10 years? Fallon probably couldn't get the flag he wanted and that's really the only way to secure good financing in the hotel industry.

The lending issue is why I firmly believe we won't see the dual-branded Homewood/Hampton built in the seaport. Construction costs are through the roof and hotel developers know the end is in sight
 

BosDevelop

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Problem with the seaport is most of the good flags from good brands are spoken for
St. Regis
Peninsula
Rosewood
Waldorf
Grand/Park Hyatt
JW Marriott

I don't believe we have any of these hotels in town nor any plans I have heard to add any. So, certainly plenty of options left in the 4 star+ category.
 

JeffDowntown

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St. Regis
Peninsula
Rosewood
Waldorf
Grand/Park Hyatt
JW Marriott

I don't believe we have any of these hotels in town nor any plans I have heard to add any. So, certainly plenty of options left in the 4 star+ category.
Three of these are currently having a serious identity crisis with the Marriott/Starwood merger. I wouldn't expect to see a new Waldorf, St. Regis or JW Marriott for a while until Marriott figures out which of these brands will survive (they simply have to many undifferentiated brands now).
 

BosDevelop

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Three of these are currently having a serious identity crisis with the Marriott/Starwood merger. I wouldn't expect to see a new Waldorf, St. Regis or JW Marriott for a while until Marriott figures out which of these brands will survive (they simply have to many undifferentiated brands now).
I highly doubt the JW Marriott and St. Regis brands are going anywhere soon. They consistently rank among the best chain hotels in the country along with Mandarin, Four Seasons etc. Marriott would be crazy to kill those off.
 

BeeLine

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Looks like they are starting organize the D parcel. They have moved in jersey barriers along the north side and are starting to move site offices over to the east side of the site. They have also taken all the 50 Liberty site information off the Project Information Board and only left the Parcel D specs.

https://flic.kr/p/23GbveA

https://flic.kr/p/24Hdc9N
 

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