All I wrote was a simple article extolling the virtues of having strong educational and health institutions in Boston. In fact, the world's best and I dare anybody anywhere to challenge Boston on that measure.
The responses have been...well...peculiar.
The first came from an expat Texan who, because he doesn't like traffic around Longwood, feels that we, whoever we is, need to call in the planning "geniuses"--his word--who laid out the master plan for the Rice Medical Center in Houston. Nice idea, wrong century. I addressed that in an earlier blog--in short, it's easy to plan a brand new complex where only tumbelweeds are bouncing.
Now, and I was actually waiting for this, I have fallen under the sniper fire of Allston Brighton. But, surprisingly I have many supporters there. It is, of course all about Harvard. Yes, Harvard has delayed its expansion plans. Yes, Harvard has deprived the neighborhood of such landmarks as the collapsing Casey & Hayes monstrosity on the Pike, now a future lab site. Someone was mad about a local dry cleaner.
Believe me, there is no love lost between me and the Crimson. I bleed Green for those who care. But, I don't think it's a burden to have the most prestigious university announce that all of its future growth, particularly that in the sciences, will take place in primarily abandoned industrial lots in Allston Brighton.
One reason. After Partners Healthcare, Harvard University is the second largest employer in the state. Yes, that is true. With over 18,000 non-faculty employees, many of whom reside in---you guessed it--Allston Brighton, and over 4,000 faculty members, Harvard is larger than Raytheon, Liberty Mutual, Fidelity, General Electric, John Hancock, you name it.
So, although I can understand the pain of losing a dry cleaner and the nostalgia for an abandoned rat-filled moving company's empty building, I just have to believe that Harvard's purchase of that rat home and its purchase of 26 additional acres of Allston Badlands may just be a very good thing for the residents who are most upset about it.
Monday, December 28, 2009
Monday, December 21, 2009
Geez, more bad vibes and now someone wants me to move to Houston!!
Hello all,
In reply to what I thought was a simply stated opinion of the importance of the health and education industries to our economy, and particularly to our commercial office space market, I received another bad vibe letter from one Scooby Doo. Now you know I don't have too much time for the bad vibes people. They tend to live by the creed "if it ain't broke, break it."
Now, I will take my lickings from someone debating the relative merits of our cities, be it New York, Chicago, LA, or Altoona. Each has its own style, its own strength. But please don't challenge Boston against any city when it comes to healthcare and then don't finish your bad vibes point by shooting yourself in the foot complaining about Boston's mutual funds industry. That's like me, a 5' 11" washed up hockey player, taunting Kevin Garnett to "show me whatcha gut 'fore I embarass your a..s" Not smart.
Anyway, this is what Scooby Doo wrote verbatim:
"Scooby Doo has left a new comment on your post "The Influence of Educational Institutions on Bosto...":
Whose going to pay the taxes ? The Medical and Educational sector are usually non-profit.
When i travel thru the Longwood Medical Area i cringe - Boston really needs to get it's act together and coordinate the planning for the entire medical area. Pedestrians can barely cross the street, traffic lights are not coordinated. Have you ever been to the Texas Medical Center in Houston. Send some of the planning genius's down there to learn something. I am tired of business as usual here in Boston, one day we will wake up and Fidelity will be headqurtered in Providence !!
And hear is when I decided to bring in not only a few drones but, what the hell it is Texas right, the full artillery. There was no need for detention centers. I think I left no survivors. Enjoy.
Scooby Doo,
I am not sure what you mean with regard to taxes. If you are referring to property taxes, it is true that non-profits do not pay tax on their property. However, in Boston, all of the major health institutions reach agreements with the City to pay "in lieu of taxes" when, by purchasing a private property, removing the property from the real estate rolls.
If you are talking about income taxes, you are also correct. However, by law, non-profits do not distribute profits to private individuals. All money is returned to the balance sheet.
What you truly fail to see is that the explosive growth in the Boston medical world, and the growth has always been explosive, has resulted today in over 385,000 jobs in the healthcare industry, the bulk of which are in Boston.
I do admire the Texas Medical Center. It reminds me a bit of NASA. Lyndon Johnson made sure Texas "won" the big prize for location but then NASA staffed the entire operation with MIT professors, students, and related companies. Read the details on Apollo 11. The guys coming up with a way to make a vent out of toilet paper, a rubber hose, and a white sock were all from Cambridge.
In 1900, Galveston was destroyed and Houston was, more or less born. By 1905, after Spindletop, Houston's population had reached a whopping 44,600. In 1900, the population of Boston was 620,000 with a metro population of 1,196,000. Mass. General Hospital was celebrating its 99th anniversary. Of course, Harvard Medical School was celebrating its 122nd.
My point is simple. The reason Longwood drives you crazy is because it is organic; it grows in and around itself. So does Mass. General, Tufts Medical Center, and Boston Medical Center. These were already dense neighborhoods when tumbleweeds rolled down the streets of Houston. We never got a chance at a master plan. Please keep your Texas geniuses in Texas.
But let's get to the heart of the matter. Boston has 227,000 employees in the healthcare industry. With a metro population of 5.7 Million, that's a ratio of 1 healthcare employee for every 25 people.
Houston not only has fewer health employees, at 219,000 but, considering Houston has a metro population of 9.8 million; there is 1 healthcare employee for every 45 people. Not quite the coverage one gets in Boston.
Let's look just at physicians and surgeons. Boston alone has 6,380 physicians; Houston has 4,530. Ratios: Boston: 1 per 897 residents; Houston: 1 per 2,177. I know where I want to live when I have a heart attack.
The average healthcare professional in Boston earns $78,770 per year. In Houston, the figure is $65,630. You know what they say about money and talent. Now do we really want to count the number of students in medical school? Do we really want to count the pure scientific medical research community, such as the Joslin Diabetes Center? Trust me we don't.
My point, Scooby Doo, is that income taxes generated by the sheer number and wages of Massachusetts health care workers eliminate whatever concern you have about taxes.
I see you mentioned Fidelity. I know them well. Boston, after only London, is the 2nd largest city IN THE WORLD in assets under management. I'm in real estate so I'll use real estate as my reference. Sticking with Fidelity, let's consider the mutual funds industry. First, Fidelity can move its headquarters anywhere it wants to. The problem is that none of its analysts will go there. They'll just walk down the street and work for any of the 25 other mutual funds in Boston. Ned just likes to make what he thinks is a scary threat every few years while he dines with his daughter daily right on Water Street, after he steps out of the same office as his father did.
Back to the facts, the mutual funds alone occupy 37% of the Class A market. That translates to over 14 million square feet of occupied space. Fidelity occupies 1.9 million square feet. They are smaller than State Street Global at 2.6 million square feet. If Fidelity packed up all its bags and left, Boston would still be the largest city in the U.S. in assets under management.
Sometimes business as usual is the envy of many, many cities. But you can always try Providence!
In reply to what I thought was a simply stated opinion of the importance of the health and education industries to our economy, and particularly to our commercial office space market, I received another bad vibe letter from one Scooby Doo. Now you know I don't have too much time for the bad vibes people. They tend to live by the creed "if it ain't broke, break it."
Now, I will take my lickings from someone debating the relative merits of our cities, be it New York, Chicago, LA, or Altoona. Each has its own style, its own strength. But please don't challenge Boston against any city when it comes to healthcare and then don't finish your bad vibes point by shooting yourself in the foot complaining about Boston's mutual funds industry. That's like me, a 5' 11" washed up hockey player, taunting Kevin Garnett to "show me whatcha gut 'fore I embarass your a..s" Not smart.
Anyway, this is what Scooby Doo wrote verbatim:
"Scooby Doo has left a new comment on your post "The Influence of Educational Institutions on Bosto...":
Whose going to pay the taxes ? The Medical and Educational sector are usually non-profit.
When i travel thru the Longwood Medical Area i cringe - Boston really needs to get it's act together and coordinate the planning for the entire medical area. Pedestrians can barely cross the street, traffic lights are not coordinated. Have you ever been to the Texas Medical Center in Houston. Send some of the planning genius's down there to learn something. I am tired of business as usual here in Boston, one day we will wake up and Fidelity will be headqurtered in Providence !!
And hear is when I decided to bring in not only a few drones but, what the hell it is Texas right, the full artillery. There was no need for detention centers. I think I left no survivors. Enjoy.
Scooby Doo,
I am not sure what you mean with regard to taxes. If you are referring to property taxes, it is true that non-profits do not pay tax on their property. However, in Boston, all of the major health institutions reach agreements with the City to pay "in lieu of taxes" when, by purchasing a private property, removing the property from the real estate rolls.
If you are talking about income taxes, you are also correct. However, by law, non-profits do not distribute profits to private individuals. All money is returned to the balance sheet.
What you truly fail to see is that the explosive growth in the Boston medical world, and the growth has always been explosive, has resulted today in over 385,000 jobs in the healthcare industry, the bulk of which are in Boston.
I do admire the Texas Medical Center. It reminds me a bit of NASA. Lyndon Johnson made sure Texas "won" the big prize for location but then NASA staffed the entire operation with MIT professors, students, and related companies. Read the details on Apollo 11. The guys coming up with a way to make a vent out of toilet paper, a rubber hose, and a white sock were all from Cambridge.
In 1900, Galveston was destroyed and Houston was, more or less born. By 1905, after Spindletop, Houston's population had reached a whopping 44,600. In 1900, the population of Boston was 620,000 with a metro population of 1,196,000. Mass. General Hospital was celebrating its 99th anniversary. Of course, Harvard Medical School was celebrating its 122nd.
My point is simple. The reason Longwood drives you crazy is because it is organic; it grows in and around itself. So does Mass. General, Tufts Medical Center, and Boston Medical Center. These were already dense neighborhoods when tumbleweeds rolled down the streets of Houston. We never got a chance at a master plan. Please keep your Texas geniuses in Texas.
But let's get to the heart of the matter. Boston has 227,000 employees in the healthcare industry. With a metro population of 5.7 Million, that's a ratio of 1 healthcare employee for every 25 people.
Houston not only has fewer health employees, at 219,000 but, considering Houston has a metro population of 9.8 million; there is 1 healthcare employee for every 45 people. Not quite the coverage one gets in Boston.
Let's look just at physicians and surgeons. Boston alone has 6,380 physicians; Houston has 4,530. Ratios: Boston: 1 per 897 residents; Houston: 1 per 2,177. I know where I want to live when I have a heart attack.
The average healthcare professional in Boston earns $78,770 per year. In Houston, the figure is $65,630. You know what they say about money and talent. Now do we really want to count the number of students in medical school? Do we really want to count the pure scientific medical research community, such as the Joslin Diabetes Center? Trust me we don't.
My point, Scooby Doo, is that income taxes generated by the sheer number and wages of Massachusetts health care workers eliminate whatever concern you have about taxes.
I see you mentioned Fidelity. I know them well. Boston, after only London, is the 2nd largest city IN THE WORLD in assets under management. I'm in real estate so I'll use real estate as my reference. Sticking with Fidelity, let's consider the mutual funds industry. First, Fidelity can move its headquarters anywhere it wants to. The problem is that none of its analysts will go there. They'll just walk down the street and work for any of the 25 other mutual funds in Boston. Ned just likes to make what he thinks is a scary threat every few years while he dines with his daughter daily right on Water Street, after he steps out of the same office as his father did.
Back to the facts, the mutual funds alone occupy 37% of the Class A market. That translates to over 14 million square feet of occupied space. Fidelity occupies 1.9 million square feet. They are smaller than State Street Global at 2.6 million square feet. If Fidelity packed up all its bags and left, Boston would still be the largest city in the U.S. in assets under management.
Sometimes business as usual is the envy of many, many cities. But you can always try Providence!
Thursday, December 17, 2009
The Influence of Educational Institutions on Boston Real Estate
The Bayside Exposition Center sort of lost its way over the past decade. The Hynes stole the best smaller exhibits while the Boston convention center took everything else. What was left was "bulk product" shows--cars, boats, and the like.
In most cities, this would lead to a whole flurry of plans paid for by the government, in other words us, characterized by Disney-like visions of what to do with 20 acres of land and property in an outlying area of the city. None of the plans would come to fruition, and the building would slowly decay. Case in point--the attempt by the city of Detroit to auction of the Pontiac Silverdome in Detroit. Nobody came to the auction.
In Boston, an opportunity like this leads to a natural expansion of our strengths. As public universities, colleges, and community colleges become more popular (in inverse proportion to the ridiculously overpriced cost of private education), institutions such as UMASS are able to comfortably plan for the future, make an acquisition, and expand the campus.
Harvard did the very same thing when it purchased the former Casey & Hayes moving company building right off the Mass Pike in Alston two years ago. BU is forever picking up buildings along the Commonwealth Avenue corridor. Northeastern has almost singlehandedly redeveloped the entire Ruggles Square area. Emerson College, in its brilliant creation of a new urban campus, purchased 5 separate Class C office buildings along Boylston and Tremont Street and converted them to administrative and classroom space. The most prolific purchaser of privately owned space has been Suffolk, most notably in its purchase of 73 Tremont Street, a 300,000 square foot office property that had lost its primary tenant, JP Morgan, and was 2/3 empty. It is now, of course, full.
What is the impact on the private commercial market when institutions carry out these expansion plans? Many of the properties purchased were available in the commercial market for lease. The Suffolk purchase is a prime example of a NET ABSORPTION of office space due to the expansion of an educational institution. The Casey & Hayes building measures over 400,000 square feet and was owned by Cabot, Cabot & Forbes. CC&F carried out a beautiful renovation (the property is the large, all glass sprawling building on the north side of the Mass Pike opposite the Allston Depot restaurant.) CC&F then alternately marketed as office space and/or lab space unsuccessfully for 3 years. Harvard's purchase reduced vacancy in the Allston Brighton market by 20% in one fell swoop.
While the Bayside purchase is not comparable in its impact on the private commercial real estate market, consider that the education "industry" accounts for over 7% of all leased space in the private market. And, over the past two years, education has increased its market share even as the schools have carried out major construction projects in the non-private market.
Again, the multidimensional character of the Boston economy provides a buffer to the private real estate market to a degree not found in any other major U.S. city.
In most cities, this would lead to a whole flurry of plans paid for by the government, in other words us, characterized by Disney-like visions of what to do with 20 acres of land and property in an outlying area of the city. None of the plans would come to fruition, and the building would slowly decay. Case in point--the attempt by the city of Detroit to auction of the Pontiac Silverdome in Detroit. Nobody came to the auction.
In Boston, an opportunity like this leads to a natural expansion of our strengths. As public universities, colleges, and community colleges become more popular (in inverse proportion to the ridiculously overpriced cost of private education), institutions such as UMASS are able to comfortably plan for the future, make an acquisition, and expand the campus.
Harvard did the very same thing when it purchased the former Casey & Hayes moving company building right off the Mass Pike in Alston two years ago. BU is forever picking up buildings along the Commonwealth Avenue corridor. Northeastern has almost singlehandedly redeveloped the entire Ruggles Square area. Emerson College, in its brilliant creation of a new urban campus, purchased 5 separate Class C office buildings along Boylston and Tremont Street and converted them to administrative and classroom space. The most prolific purchaser of privately owned space has been Suffolk, most notably in its purchase of 73 Tremont Street, a 300,000 square foot office property that had lost its primary tenant, JP Morgan, and was 2/3 empty. It is now, of course, full.
What is the impact on the private commercial market when institutions carry out these expansion plans? Many of the properties purchased were available in the commercial market for lease. The Suffolk purchase is a prime example of a NET ABSORPTION of office space due to the expansion of an educational institution. The Casey & Hayes building measures over 400,000 square feet and was owned by Cabot, Cabot & Forbes. CC&F carried out a beautiful renovation (the property is the large, all glass sprawling building on the north side of the Mass Pike opposite the Allston Depot restaurant.) CC&F then alternately marketed as office space and/or lab space unsuccessfully for 3 years. Harvard's purchase reduced vacancy in the Allston Brighton market by 20% in one fell swoop.
While the Bayside purchase is not comparable in its impact on the private commercial real estate market, consider that the education "industry" accounts for over 7% of all leased space in the private market. And, over the past two years, education has increased its market share even as the schools have carried out major construction projects in the non-private market.
Again, the multidimensional character of the Boston economy provides a buffer to the private real estate market to a degree not found in any other major U.S. city.
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