There’s a loud cry for premier office space in Boston’s Seaport District, and Skanska is preparing a response. The development company recently commenced construction of Two Drydock, a cutting-edge, 225,000-square-foot office tower that will cost $128 million to bring to fruition.
With the address of Two Drydock Ave., Two Drydock will sprout up on a site known as Parcel Q1 in the Seaport District’s Marine Industrial Park micro-market. In addition to Class A office space, the property will feature ground-level retail space and an approximately 12,000-square-foot public park. Architectural firm SGA designed the 12-story tower, which is being built to meet LEED Gold certification as part of the property’s focus on sustainability.
Two Drydock is just one of many projects in the Seaport District that bear the Skanska mark. “Skanska has led the transformation of this neighborhood,” as noted in the annual report of Skanska, parent company of Skanska USA. The company’s work in the submarket includes the 440,000-square-foot office high-rise at 101 Seaport Blvd., which it sold for $452 million, and Watermark Seaport, a two-building, 346-unit multifamily community. Skanska also completed the development of 121 Seaport Blvd., a 17-story tower featuring 400,000 square feet of office space above a 50,000-square-foot retail podium. The spec project is already fully leased.
Development of Two Drydock is on schedule to reach completion in December 2019.
Desperately seeking seaport square footage
Two Drydock is a speculative project that, due in no small part to its location, is likely to find a warm reception from office users. “Despite ending the first quarter with relatively flat levels of absorption, demand in the Seaport has not waned,” according to a report by CBRE, the commercial real estate services firm that has been tapped by Skanska to oversee leasing at Two Drydock. “Existing large block availabilities continue to be scarce.”
Proof of the high level of demand for office accommodations in the Seaport District is in the numbers. The average vacancy rate for Class A space in the submarket in the first quarter was a mere 1.7 percent, the lowest vacancy rate for any office property class in any of Boston’s submarkets. Additionally, the average asking rent of $67.56 per square-foot for Class A product in the Seaport District led the market as well.
Image courtesy of Skanska