The More Things Change...
900 Chelmsford Street, the former Wang Towers and currently known as Cross Point, sold this week for $100,000,000. With a gross building area of 1,332,009 square feet, the sale price per square foot is $75.08. This is the second former Wang Laboratories building to sell in the past six months. The other was 1001 Pawtucket Boulevard, an industrial building, sold in January for $15,500,000.
The first thing that I thought about when I read in the Sun that Cross Point had sold was the sale 20 years ago of the same property for $525,000. At that time the economy was recovering from another real estate bubble burst, like we are today. Wang was the largest employer in Lowell at that time and when they went bankrupt and laid off thousands of employees devastated the city.
In 1994 the property was more or less empty and there was very little interest in the towers when they came up for auction. After the auction was another story. Everyone in the real estate industry in eastern Massachusetts was talking about the sale, wishing that they had known the property was going to sell at such a low price. Even the New York Times reported the news. At the auction bidding was to start at $3,000,000. When no one bid the auctioneer lowered the starting bid to $100,000. Eventually the final bid was $525,000. The sale was taken as a sign of the times for Lowell.
The buyer, Christopher J. Kelly and partners took a big risk purchasing the property with the plan to convert it into a multi-tenant building. The buyer got the property up and running again and lowered the vacancy to about 2%. Four years later the buyers sold the property for $100,000,000.
The 2014 sale is again a sign of the times for Lowell and greater Lowell. In the early 1990s the local commercial real estate market took a huge hit. The market corrected itself and sometimes over corrected. Now in 2014 the local commercial market has taken a much smaller hit, although it has returned to late 1990s early 2000s values (unlike Boston’s inner suburbs, which have shown some appreciation in recent months). Lowell is more prosperous and is affected less by market fluctuations now that it has diversified and has become a multi-company town with multiple industries. Maybe Lowell is finally out of its boom/bust cycle. Maybe finally the more things change, the more things change for the better.