Behind The Deal: Nordblom's South End

The quiet Nordblom Co made a big splash recently, winning a green light from the city for its approximately $200M multifamily/retail complex in the South End’s New York Streets section. (Talk softly and carry a big development.) It’s been investing there for years and happy that others are joining the parade, EVP and partner Og Hunnewell tells us.

While there are still several more approvals to snag, says Og (above with Todd Nordblom and Steve Logan), Nordblom is excited about Thursday’s Article 80 approval of the development firm’s two-building project at 345 Harrison Ave: 602 apartments and 34k SF of ground-floor retail. That National Development and Normandy Real Estate Partners are building major multifamily projects nearby doesn’t worry him. To the contrary; together they’re creating a critical mass of activity and vibrancy in a long overlooked district. (Three's a crowd... or a party.) The developments are “complementary,” one includes a big Whole Foods supermarket and additional retail, plus they’re “sequencing quite nicely,” Og tells us. It would be “more challenging” to be a lone pioneer. 

Nordblom entered the South End submarket with its purchase of the 250k SF former Teradyne HQ at 1000 Washington St (above) in ’06. While it was relatively quiet, the neighborhood is strategically located near the Back Bay, downtown, and trendier parts of the South End, and is well served by mass transit. Sensing it was a “coming area,” Nordblom started pursuing 345 Harrison in ’08. With the financial crisis fueled recession, the market “softened” and the South End “languished.” But they redeveloped this former single-tenanted office building thanks to conservative investment practices and it's now 96% leased. 

Over the years, Boston and its multifamily market have “morphed dramatically,” Og says. It’s become more of an 18-hour city attracting young professionals eager for an urban lifestyle. (The other six hours are for quiet reflection.) Nordblom is riding the momentum. Meanwhile, in ’12, the city rezoned the neighborhood, allowing for the additional height in Nordblom’s two 14-story buildings. The increased height is helpful but not a game changer. Taller buildings mean higher construction and entitlement costs; therefore, greater height may not unlock a great deal of additional value, Og says. In the fall, they hope to start construction of the CBT-designed complex featuring workforce housing.