Hines Breaks Ground on Last-Mile Distribution Facility

Chelsea Point. Image courtesy of Hines

Hines has completed demolition and broken ground at 250 Marginal St., an 8.6-acre infill site in Chelsea, Mass., for Chelsea Point, a 146,409-square-foot Class A distribution facility.

The site was acquired last year by Hines U.S. Property Partners, the firm’s flagship commingled U.S. core-plus fund. Financing for this project is through a construction loan from J.P. Morgan.

A Hines spokesperson confirmed to Commercial Property Executive that dollar amounts for the project and the construction financing are not being released. Information from CommercialEdge, however, shows a three-year, $57.9 million loan from JPMorgan Chase originated in August 2022.

READ ALSO: How Debt Costs Will Affect Industrial Demand This Year

The site is in what Hines describes as “a key last-mile market for distribution and freight shipping” and is only 2 miles from Boston Logan International Airport and 3 miles from downtown Boston.

The building will feature a 36-foot clear height and the ability to accommodate a single user or multiple tenants. Construction is expected to be completed in the first quarter of 2024.

The project architect is RODE Architects Inc., of Boston.

Chelsea Point. Image courtesy of Hines

In a prepared statement, Michael Francis, managing director at Hines Boston, pointed out that Chelsea Point will be Hines’ first industrial development in Boston, where, he added, there is a significant supply and demand imbalance for infill logistics product.

Hines has selected JLL to be the property’s listing agent. JLL’s New England industrial team will consist of Managing Directors Rachel Marks, Michael Ciummei and Joe Fabiano.

Too much growth?

The amount of new space entering metro Boston’s industrial market—about 3 million square feet just in the first quarter, most of it speculative—has been enough to tip year-to-date absorption into a negative 818,000 square feet and push average direct asking rents down about 80 basis points, to $14.37 per square foot, according to a new report from JLL. Metro-wide, total vacancy is up a bit, to 5.4 percent.

In the North submarket, distribution space saw net negative absorption of 183,000 square feet, or 0.7 percent, on an inventory of 26.3 million square feet. And a very substantial 4.4 million square feet of space was underway in the submarket as of the first quarter.

Last October, Greystar Real Estate Partners began construction on a 412,500-square-foot industrial project in East Bridgewater, Mass. The developer had acquired the 46-acre site at 798 N. Bedford St. from Rhino Capital Advisors for $22.3 million.