Booming Chelsea Catches Developers’ Eyes
The time has arrived. For years, Chelsea was Boston’s forgotten neighbor, a nearly once bankrupt city, in part of the large demographic upheaval and haunted by a lack of economic development. Today, the arrival of the FBI Headquarters and Encore Casino has pivoted Chelsea into a development hotbed home to a booming hotel, industrial and rental market.
As a direct result of the coming casino and lack of available land in downtown Boston, there are 210 hotel rooms under construction, and another two hotels in the permitting and planning stage, marking Chelsea as an upcoming hospitality destination. Last year, National Development acquired 130 Eastern Avenue; a 7-acre industrial parcel expected to be redeveloped into a new industrial warehouse. In October 2017, The Seyon Group acquired two industrial properties further fueling the demand of ‘last mile’ warehouse space set in motion by the ‘Amazon Effect.’
In the multi-family market, the conversion of loft and micro style apartments, in addition to new construction has spurred an apartment boom. One North of Boston, a 2016 development has achieved 96% occupancy, and is asking a $2.78 PSF; an affordable price given its prime location and luxurious amenities.One North of Boston reached full stabilization within two years, similar to new developments in Fenway and Allston, further indicating Chelsea’s ability to attract young professionals. The Pioneer, a 286 unit development at Chelsea’s crossroads is throwing stones away from downtown and is slated to open in 2018.
Although there have been only a limited number of “For-Sale” condominiums, the market continues to thrive with existing inventory. The average asking price for a house in Chelsea is $337,000, with sale prices per square foot fetching $334, up 23% since 2016 and 5% this year. Chelsea still remains a positive alternative for those priced out of downtown communities, and with the addition of the Silver Line, connectivity in the region has never been stronger. Yet, given the explosion of other submarkets, the question remains if Chelsea can retain working professionals?