December 15, 2006
McKesson Takes 154,744 SF
GlobeSt.com
By Beverly Ford
NORTHBOROUGH, MA-Pharmaceutical and medical device supplier McKesson Medical-Surgical Inc. has signed a lease renewal and expansion for 154,744-sf of distribution space. The transaction gives the company an additional 26,158 sf and keeps it at its 55 Lyman St. location here for another five years.
McKesson, a division of San Francisco-based McKesson Corp., previously occupied 128,586 sf in the 260,561-sf property where it has been a tenant since 2004, according to Paul Leone, with Richards Barry Joyce & Partners.
Leone says the deal was important for both McKesson, which wanted to expand without relocating, and landlord Bailard Lyman Street LLC, which wanted to keep a large and credit-worthy tenant.
“At the end of the day, it was a win-win for both groups,” he says.
Terms of the lease were not disclosed but Leone says asking rates for the building’s remaining 48,918-sf of vacant space is about $6.50 per sf triple net. The single-story distribution building with 32-foot clearance is also home to Federal Express.
Leone, along with John Lashar, also with Richards Barry Joyce and Partners, handled the deal for the landlord while the tenant was represented by Jay Sholl, with Trammell Crow Co.
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December 15, 2006
Novartis moving 2d unit to area
Swiss drug maker to put headquarters for vaccines, diagnostics division in Cambridge
Boston Globe
By Stephen Heuser, Globe Staff
Two years after opening its global research headquarters in a former Central Square candy factory, the Swiss drug giant Novartis AG said yesterday it will move a second division to Cambridge in an expansion that will make it the city's largest corporate employer.
The company hasn't yet settled on a location, but said the new office will house 250 executives and researchers for Novartis Vaccines and Diagnostics , a unit that makes flu shots and blood tests. Their arrival next year will bring Novartis's total Cambridge footprint to nearly a million square feet and 1,550 people, larger than local biotechnology giants Genzyme Corp. and Biogen Idec Inc.
Novartis's move continues the rush of mainstream pharmaceutical companies into a city once known mainly as a hatching ground for obscure new biotech ideas. Drawn by the talent pool of local employees and the cutting-edge science at Harvard University and the Massachusetts Institute of Technology, several drug companies have opened large research labs in the Boston area in recent years.
Merck & Co. built a 12-story research building in Boston's Longwood Medical Area in 2004, and last month Schering-Plough Corp. cut the ribbon on a lab in Kendall Square where it plans to move 200 scientists. AstraZeneca PLC and Wyeth have nearby labs with several hundred researchers each.
Even in that group, however, Novartis stands apart. Its worldwide research chief, Mark Fishman , was hired from Massachusetts General Hospital and directs thousands of employees worldwide from his office in the former Necco factory in Cambridge. Executives at the planned vaccine headquarters, a separate division, will oversee 4,500 employees from California to India.
With $36 billion in sales and market value of nearly $140 billion, Novartis is one of the world's richest drug companies. It develops treatments for cancer, diabetes, and heart disease in its Cambridge labs. It also has an infectious-disease research unit.
Local life science leaders see Novartis's continued expansion as a symbol of Massachusetts' growing prominence in the field. Thomas M. Finneran , president of the Massachusetts Biotechnology Council , said that as other states and regions increasingly compete to land new biomedical jobs, the presence of the massive Swiss company has a powerful effect on the rest of the industry.
"People know that Novartis doesn't screw around," Finneran said. "Their due diligence is of the highest caliber, and it sends just an incredible signal."
Novartis said it plans to move executives and administrators from California, Philadelphia, and Oxford, England, in the first half of 2007. By the end of next year, the company expects to have more than 250 employees at its vaccine headquarters, including at least 90 new hires.
The vaccine division chiefly consists of the former Chiron Corp. of California, which Novartis bought this year for $5 billion. Thanks to Chiron's products, Novartis is now the second-leading producer of flu vaccine in the United States, and plans to ship 30 million doses this season. It also makes rabies vaccine and is trying to develop a vaccine for avian flu.
Since relocating its research division to Cambridge, Novartis has built strong ties to local companies. It signed drug development deals with biotech firms Infinity Pharmaceuticals Inc. and Alnylam Pharmaceuticals Inc. , and also collaborates with the Broad Institute of Harvard and MIT.
Bob Richards , president of real estate company Richards Barry Joyce & Partners, LLC , calls the Novartis move a "vote of confidence" in Cambridge, but also cautions it could increase pressure on the smaller start-up companies that helped build the city's reputation.
"Kendall Square is going to start becoming really an epicenter for the big pharmaceutical companies," Richards said, "and [smaller] biotech firms are going to start having seriously considering the suburbs."
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December 13, 2006
McKesson unit signs lease in Northborough
Boston Business Journal
McKesson Medical-Surgical Inc., a division of McKesson Corp., has signed a lease for 154,744 square feet.
The San Francisco-based health services company extended its lease at 55 Lyman St. in Northborough, Mass. and expanded by 26,158 square feet. The landlord, Bailard Lyman Street LLC, was represented by Richards Barry Joyce & Partners LLC and the tenant was represented by Trammell Crow Co.
McKesson occupies more than half of the 260,561 square-foot high-bay distribution building which features 32 foot ceilings and trailer storage space.
The industrial building's location -- close to Interstate 495, Route 9 and the Massachusetts Turnpike -- makes it ideal for distribution, said John Lashar, a partner at Richards Barry Joyce & Partners, in a statement.
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November 30, 2006
Proven Process Gets New Headquarters
GlobeSt.com
By Beverly Ford
MANSFIELD, MA-Medical device maker Proven Process Medical Devices gained a higher profile and its own headquarters building when it inked a 10-year lease on 30,912 sf of office and R&D space at 110 Forbes Blvd. in Mansfield’s Cabot Industrial Park. The company, which will move into the property by the end of the year, also added more than 10,000 sf to its operation.
Ron Friedman, with Richards Barry Joyce & Partners, tells GlobeSt.com that the single tenant property offered the firm a higher profile identity in a location that would allow for the easy recruitment of new employees as it ramped up its business. Proven Process, which designs, develops and manufactures medical devices, also has the option of expanding at its new location. Previously, the company was located in about 20,000 sf at 141 Washington St., in Walpole.
Terms of the lease were not disclosed but Friedman says similar space in the Mansfield area rents for between $10 and $12 per sf net.
Friedman, along with colleagues John Lashar, and Michael Frisoli represented Proven Process. The landlord, AMB Corp., was represented by Jim Nicoletti and Steve Clancy, with CB Richard Ellis’ Boston office.
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November 24, 2006
REITs, limited supply drive lab space investment boom
Boston Business Journal
by Michelle Hillman
The real estate investment community has figured out the specialized life science market is the place to be, leading buyers to pay more than they ever have for lab property in Cambridge.
Two main factors have driven the five-fold increase in investment in life sciences property over the past three years: the limited supply of lab buildings on the market and the competition between two major life science real estate investment trusts.
This year alone, $823 million has been spent on 2.1 million square feet of lab property in Cambridge, said Brendan Carroll, director of research at Boston real estate firm Richards Barry Joyce & Partners LLC.
"We've seen a maturation of the investment industry surrounding the biotech industry that has created an accelerated pace," said Carroll.
Carroll said that until last year, the life science real estate investment market was insignificant. But just over the past two years, a total of $1.8 billion has been spent on 4.8 million square feet of lab property in Cambridge -- with $1.3 billion of that in 3.2 million square feet of lab space in East Cambridge, according to Richards Barry Joyce & Partners.
Before 2005 the only lab building sold in Cambridge was at 620 Memorial Drive, which sold for $46.5 million, or $508 per square foot. Now state-of-the-art lab buildings can sell for up to $1,000 per square foot.
Two REITs -- Alexandria Real Estate Equities Inc. (NYSE: ARE) and BioMed Realty Trust Inc. (NYSE: BMR), both California-based -- have forked over larger and larger sums of cash to acquire lab property in prime locations.
Over the past year, owners of life science property in Cambridge saw unprecedented interest in their properties, starting with the intense competition for Lyme Properties LLC's portfolio of seven properties, including Genzyme Corp.'s East Cambridge headquarters.
BioMed Realty pushed the market to new heights when it purchased the portfolio for $531 million in April -- the largest such sale of life science space in the country.
This week, BioMed confirmed it paid $507 million for Lyme's Center for Life Science in the Longwood Medical and Academic Area.
The building, at 3 Blackfan Circle, won't be finished until 2008.
By the time the building opens, BioMed plans to spend more than $700 million on the building or about $1,000 per-square-foot.
"It's more acceptable as an asset class, and that's why so many people are bidding on them," said Robert E. Griffin Jr. of Cushman & Wakefield of Massachusetts Inc. "People didn't understand it before."
In June of this year, Alexandria paid $600 million for the 1.2 million-square-foot Technology Square campus in East Cambridge, an indication of how high buyers were willing to go for one-of-a-kind assets in unbeatable locations.
As life science companies such as the Novartis Institutes for Biomedical Research Inc., Genzyme and Biogen Idec Inc. continue to expand and absorb what little new lab space is being constructed, lab property in Cambridge will continue to command high prices.
Griffin, whose company sold both the Technology Square campus on behalf of the Massachusetts Institute of Technology and the Center for Life Science on behalf of Lyme Properties, said lab properties are expensive to build and therefore command high rents; the short supply of lab property makes for an attractive investment.
"Lab space gets more expensive, not less expensive," said Griffin about the resale potential.
As a result, just as many bidders are entering the race for lab property as they are for office space. The field has become crowded with as many as 20 bidders looking at lab property that five years ago may have only attracted two or three, said Frank Wuest, senior vice president at the Boston office of Cleveland-based Forest City Enterprises Inc.
"The market today mirrors the overall capital market," said Wuest.
Michelle Hillman can be reached at mhillman@bizjournals.com.
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November 8, 2006
Biotech cos. gobbling up space
Boston Herald Business Reporter
By Scott Van Voorhis
Here’s more evidence the local biotech market is booming - dwindling lab space.
The amount of vacant lab space in Greater Boston dropped to 11.9 percent over the past six months, commercial real estate firm Richards Barry Joyce & Partners reports.
The drop came as biotech and drug companies gobbled up more than 600,000 square feet of research space in Boston, Cambridge and the suburbs.
At the head of the growth vanguard were heavy hitters like Genzyme, Millennium and Novartis, which sponsored or co-sponsored 43 percent of all Massachusetts Phase I clinical trials overseen by the U.S. Food and Drug Administration.
Novartis is now the largest lab user in Cambridge, having recently occupied an additional 66,000 square feet at Technology Square. Meanwhile, all three major lab markets, in Boston, Cambridge and the suburbs saw big expansions by companies occupying lab space.
Still, Cambridge held onto its role as the region’s lab and research leader.
Biotech and drug companies in the city expanded their lab holdings by 531,000 square feet during the past two quarters. That pushed Cambridge’s vacancy rate below 10 percent, from 14.5 percent this spring.
In East Cambridge, dominated by Kendall Square and MIT, the improvement was even more dramatic. There, lab vacancy fell from 17 percent to 6.3 percent.
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November 8, 2006
Available Lab Space Declining
GlobeSt.com
By Beverly Ford
BOSTON-The amount of available lab space in the Greater Boston area has dropped from 14.9% to 11.9 % in the past six months, an indication of widespread growth in the region’s booming biotech industry, a report by Richards Barry Joyce & Partners indicates.
About 605,000 sf of laboratory space was absorbed by the state’s biotech industry in the six-month period ended Sept. 30, with Cambridge the clear winner in the boom. Cambridge absorbed 531,000 sf of the space during the period, an absorption that was the greatest for any two quarter period in the history of the city’s lab market, the report found.
In Boston’s 2.5-million-sf lab market, the city experienced 34,000 sf of negative absorption during the last six months, increasing the city’s vacancy rate to 4.1% from 2.7%. Space constraints is a factor in the increase in vacancy. The region’s suburban market saw 108,000 sf of positive absorption during the period which lowered suburban laboratory vacancy from 23.8 % to 20.9%.
Among the region’s largest lab space users was Novartis, which became the largest lab user in Cambridge with the addition of 66,000 sf at Technology Square.
The report also found that more than 1.5 million sf of new biotech space will come on line in Boston and its suburbs within the next two years.
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October 6, 2006
Hub vacancy rate improves
Boston Business Journal
Stagnant job growth and the loss of company headquarters here haven't kept the Boston commercial real estate market down -- at least not in the last year.
The improvement in the last four quarters has been fueled by large tenants growing and expanding, according to real estate firms that compile market reports.
According to Richards Barry Joyce & Partners LLC, the vacancy rate in Boston's downtown office market at the end of the third quarter this year declined to 11.7 percent from 13.9 percent in the same quarter last year. The Financial District's vacancy rate also improved year over year to 11.2 percent at the end for the third quarter this year from 14.8 percent in the same quarter last year.
"The most dramatic decline has been the Financial District," said Brendan Carroll, a director at Richards Barry Joyce & Partners. "For some time it's been understood the Back Bay market has been in very good (standing). In the Financial District the decline has been very dramatic in this last year."
Two years ago office towers in the Financial District were walloped by consolidation as companies like Bank of America Corp. and State Street Corp. put hundreds of thousands of square feet on the market.
The consolidations have cooled and much of the space has been leased by new tenants or occupied by the original tenants. The Class A towers in the Financial District are now posting a 9.6 percent vacancy rate, said Carroll. Most recently, Eaton Vance Corp. signed a lease for 230,000 square feet of space previously occupied by Deutsche Bank AG.
Real estate executives believe the market can only improve if companies continue to grow and developers hold off on adding new office space to the supply.
There are currently 150 tenants actively searching for 3.5 million square feet of office space, according to CRESA Partners Boston, a real estate firm that represents tenants.
"I don't think we're going to see any new construction in the next 24 months," said Joseph Sciolla, managing director at CRESA Partners.
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09.30.06
Region’s office vacancies at 5-year low; But tightening of market could limit search for large sites
Patriot Ledger
The south-of-Boston, or Route 128 south office market continued to strengthen in the third quarter, with vacancy rates hitting their lowest levels since 2001.
Vacancies declined to 11.6 percent from 13.9 percent at the end of June, according to a report this past week by the Boston commercial real estate brokerage Richards Barry Joyce & Partners.
The Registry of Motor Vehicles’ move from Boston to the former Blue Cross Blue Shield of Massachusetts building at 25 Newport Ave. Extension in North Quincy was the biggest single transaction during the quarter.
The Registry leased 98,000 square feet in the building. In another transaction, Meditech added 40,000 square feet to its headquarters offices in Westwood.
The Route 128 south market remains attractive to major employers looking for large blocks of space, said Brendan Carroll, director of research for Richards Barry Joyce & Partners.
‘‘It has access to skilled labor, yet housing which is affordable relative to the rest of the region,’’ Carroll said.
But as vacancies appear headed into the single digits, a tightening market could discourage major users from looking at local properties.
Financial giant Marsh & McLennan is considering moving its Boston offices out of the Hancock Tower, where the New York-based firm occupies about 90,000 square feet, in favor of a suburban location, according to a Boston Herald report on Friday.
As the Route 128 south market tightens, it will become increasingly difficult for companies to find large blocks of first-class office space, Carroll said.
‘‘There are a limited number of high-quality availabilities in the 128 south market relative to other parts of the region,’’ he said. ‘‘You begin to run into a tenant who just can’t simply find what they want because the market’s getting tighter.’’
One significant office property that will become available is 100 Hancock St. in Quincy, a 203,000-square-foot building that Boston-based Blue Cross Blue Shield of Massachusetts will vacate next year.
Most of the employees will be transferred to a new 525,000-square-foot building in Hingham that is expected to open next spring, Blue Cross Blue Shield spokesman Chris Murphy said.
The 11-million-square-foot Route 128 south market now has the lowest vacancy rate among Boston suburbs, except for the small Route 495 south market, which totals just 2 million square feet and includes most of the towns along Interstate 495 from the Massachusetts Turnpike to Route 24.
In the city of Boston, the vacancy rate dropped from 12.6 percent in the second quarter to 11.7 percent in the three months that ended this weekend.
Throughout the 173-million-square-foot Greater Boston office market, companies added 1.6 million square of space during the quarter as the overall vacancy rate declined from 17.5 to 16.5 percent.
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September 27, 2006
Downtown, Where The Price Is Right
Wall Street Journal
Click here to read the Wall Street Journal Article
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September 5, 2006
Spec Development Is Hot in Waltham
GlobeSt.com
By Beverly Ford
WALTHAM, MA-Developers are turning up the heat on Boston’s suburban office market with plans to add 1.6 million sf in speculative development to the Waltham submarket as demand for class A office space continues to soar.
“Waltham is the sole center of speculative development,” Brendan Carroll, a researcher with Richards Barry Joyce and Partner’s Boston office, tells GlobeSt.com. Carroll says demand for office space is so strong, in fact, that developers are moving ahead with building plans despite any widespread tenant commitments.
“Because of low vacancy rates within class A buildings, which are presently under 10%, demand continues unabated,” says Carroll, who is presently tracking 1.6 million sf in speculative projects in the Waltham market alone.
Driving that development, says Carroll, is Waltham’s proximity to a highly skilled labor base and the city’s historical status as one of the first office markets developed in Boston’s suburbs. “It is presently the most prestigious address to be associated with in the Boston suburban market,” Carroll notes, adding that the demand for space in the Watch City is reflective of an ongoing flight to quality by local businesses.
Among the projects gearing up or currently under construction is the planned redevelopment of a 119-acre site overlooking Route 128 that once served as the headquarters for the Polaroid Corp. by the Related Cos. of New York. Davis Marcus Partners of Boston also is planning about 626,000 sf of speculative development, including a 185,000-sf, three-story office building on the company’s Reservoir Woods campus.
Duffy Associates is gearing up to build a 143,000-sf speculative office building at Waverly Oaks Office Park in that city, as is Equity Office, which is currently in the process of getting permits to develop a 335,000-sf flex building at 175 Wyman St. Boston Properties also has started assembling a number of smaller sites in the area for what could eventually become a 600,000-sf urban campus, Carroll says.
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August 31, 2006
Upromise Plans Corporate HQ Move
GlobeSt.com
By Beverly Ford
NEWTON, MA-Upromise. Inc. will move its corporate headquarters to 75-95 Wells Ave. here. The deal is for 10 years that gives the growing firm 78,084 sf on three floors in the 240,000-sf building.
Michael Frisoli, with Richards Barry Joyce & Partners’ Boston office, tells GlobeSt.com that the relocation from 117 Kendrick St. in Needham will allow the company to expand its operations by about 30,000 sf and give the firm a site close to its former office with ample parking and amenities. Upromise will move into the building in April and take a portion of the first, third and fourth floors in the 85%-leased property.
Terms of the lease were not disclosed but office rates in the Newton area generally range in the mid to high $20-per-sf range, market studies show. The transaction was handled for the tenant by Frisoli along with Jonathan Varholak and John Wilson, all with Richards Barry Joyce & Partners. Jay Nugent, with Jones Lang La Salle’s Boston office, represented the landlord, Morristown, NJ-based Normandy Real Estate Partners.
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08.25.06
Two Tenants Take Nearly 18,000 SF at St. Martin Dr.
GlobeSt.com
By Beverly Ford
MARLBOROUGH, MA-Two new tenants have taken leases totaling 17,978 sf at a Marlborough business park. The leases push up occupancy to 60% at the 34 St. Martin Dr. property.
Banner Door Corp., a distributor of overhead doors, will take for 9,308 sf in the single-story building, while Preston Productions signed on to occupy 8,670 sf. Both leases were for five years, Paul Leone, with Richards Barry Joyce & Partners, tells GlobeSt.com. Both firms moved into the property several weeks ago.
Leone says Preston Productions selected the 201,360-sf building, located in the 495 Tech Center West, because it offered a good level of office finish along with production and warehouse space it needs for its communications and event planning firm. Banner Door, he adds, also found the building to be “a good fit” for its office and warehouse operation. Terms of both leases were not disclosed, but lease rates for the property range from $6.75 to $7.75 per sf triple net, he says.
The transaction was handled for the landlord, Rreef North America, by Leone and John Lashar, also with Richards Barry Joyce & Partners, in conjunction with David Crane, vice president at Rreef North America. Lashar and Leone also represented Preston Productions in the negotiations. Banner Door was represented by Eric O’Brien of O’Brien Commercial Properties of Berlin.
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August 24, 2006
Commercial Market Could See Record Year
GlobeSt.com
By Beverly Ford
BOSTON-As home sales in Massachusetts continue to tank, the state’s commercial market is on the threshold of another record year with rising sales having already topped the $3-billion mark, real estate professionals tell GlobeSt.com.
“The way it looks right now, I think we’re set to have another record year,” David Begelfer, chief executive officer with the Boston office of the National Association of Industrial and Office Properties, tells GlobeSt.com. In the Downtown office market alone, sales for the first half of 2006 have already topped $1.3 billion and are on par to exceed the more than $2-billion record for commercial sales set for Downtown in 2004. Sales of suburban office properties are also up, surpassing $600 million in the first six months of the year.
“The first half of the year came out booming,” Richard Bradbury, a vice president with Richards Barry Joyce and Partners’ Boston office, tells GlobeSt.com. Fueling investor interest in the Bay State is a lack of new commercial product, rising rental rates and Massachusetts’ historically strong investor market, Begelfer and Bradbury say.
While rising interest rates contributed to a 27% drop in Bay State home sales in July and created the steepest plunge in residential real estate since 1995, higher interest rates have had little impact on the state’s commercial market. That's because rising rents have offset increasing interest rates to keep cap rates flat, Bradbury says.
“As interest rates go up, investors expect cap rates go up but that hasn’t happened yet,” he says, noting that cap rates have remained flat and are expected to continue at that level, at least for the near future.
Also helping to fuel the state’s commercial market is investor uncertainty over the stock market, Bradbury adds. In comparative studies, real estate investments have outperformed the stock market in the last eight years, making commercial real estate a better return for investors, he notes.
With a large amount of capital available for investment and pent up demand for properties, the state’s commercial market has become a hot commodity for institutional investors, even those from out of state. “It’s such a strong market that if you are an owner, you really have to wonder how much better you can do by waiting” to sell, Begelfer says.
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August 22, 2006
Back Bay Gains in Absorption Race
GlobeSt.com
By Beverly Ford
BOSTON-Two office markets just across town from each other experienced differing absorption rates during the second quarter of 2006, with the Back Bay gaining in absorption what the Financial District lost.
According to a study prepared by Richards Barry Joyce and Partners of Boston, the Back Bay had a positive absorption rate of 53,000 sf in the second quarter, which lowered vacancy rates in that neighborhood to 10.4%, a 0.4% drop over the same period last year. In the Financial District, a 52,000-sf negative absorption rate pushed vacancy up slightly by 0.1% to 12.7% for the quarter.
RBJ&P researcher Brendan Carroll tells GlobeSt.com that the similar absorption numbers are just coincidental and do not indicate a shift in the popularity of either neighborhood. “Statistically, a fairly healthy supply-demand balance can be found in both the Financial District and the Back Bay,” says Carroll.
But while the expansion of financial and law firms has been driving the Financial District’s market, the Back Bay is attracting a broad spectrum of users to what 15 years ago was a neighborhood dominated by financial institutions, Carroll says. “There is an attraction currently to what is referred to as the 24-7 environment of the Back Bay,” he notes, adding that the neighborhood, with its nearby restaurants, shops and other amenities, appeals to firms that want to conveniently entertain clients.
But with its closeness to Faneuil Hall and the Boston waterfront, along with the advent of the long-awaited Rose Fitzgerald Kennedy Greenway, the Financial District is undergoing a renaissance that is also drawing companies to its tower space, Carroll says. “They are both different product types for different needs,” he notes.
The drop in absorption rates in the Financial District appears to be just a one-quarter “blip” on the radar, the RBJ&P report notes, with positive absorption rates predicted for the rest of the year. As for the Back Bay, with a tightening office inventory, occupancy rates should continue to improve as the economy gains steam.
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August 22, 2006
Three Sign for 43,217 SF at Solomon Pond Park
GlobeSt.com
By Beverly Ford
MARLBORO, MA-Leases signed by an insurance company, a medical device firm and a manufacturer of electronic instruments has put three tenants in 43,217 sf of space at Solomon Pond Park in Marlborough, filling the business park’s more than 500,000 sf to above the 80% occupancy mark.
The largest of the leases was signed by ShibaSoku R&D Center, which provides manufacturing, marketing and support for electronic devices. The firm, previously located in Burlington, will move into 16,625 at 450 Donald Lynch Blvd. once tenant upgrades are completed, Ogden Hunnewell, president of Nordic Properties, tells GlobeSt.com.
Signing a new lease on 10,679 sf in the same building was Creganna Medical Devices, a manufacturer headquartered in Ireland. Rounding out the three-lease deal was Acadia Insurance, a regional property casualty insurer, which signed a lease renewal on 15,913 sf of space at 290 Donald Lynch Blvd.
Terms of the leases were not disclosed but Hunnewell says space in the park leases for between $12 and $24 gross. The three lease deals are a significant indicator of improving market conditions, particularly in areas near thriving retail districts, like Solomon Pond Park, says Hunnewell.
“The pattern we’re seeing is that mixed-use environments with retail nearby continue to be one of the real attractions,” he notes. “Areas that have it are doing exceptionally well.”
Landlord BGI Holdings, a partnership between Nordic Properties, of Burlington, and The Bristol Group of California, was represented in the transaction by John Lashar, Brian McKenzie and Paul Leone, all with Richards Barry Joyce & Partners’ Boston office. The three brokers worked on the deal with Hunnewell as well as Al McNiff and Patrick O'Neill of Nordblom Management Company. Representing ShibaSoku was Bill Sullivan of R.W. Holmes Realty Co., of Natick, MA. Acadia Insurance was represented by Brooks Murphy of The Staubach Company of Boston, while Creganna was represented by Greg Hoffmeister of T3 Advisors of Waltham.
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August 14, 2006
Occupancy at North Station Building Now Over 90 Percent
Banker & Tradesman
By Joe Clements
For some in Boston’s North Station area, the dismantling of the Central Artery viaduct and Green Line elevated transit line offer fresh commercial real estate opportunities, but just as a slew of new construction proposals are emerging there, at least one local development firm is close to wrapping up its investment in the eclectic business district.
Intercontinental Real Estate Corp. of Brighton has landed two new tenants for its 226 Causeway St. office building, headlined by a 10-year, 35,000-square-foot lease to Oxfam America. Coupled with an 8,000-square-foot commitment by Cleary Insurance, occupancy at the former bakery warehouse now exceeds 90 percent, bolstering Intercontinental’s initial notion that North Station would prove attractive to tenants once the extensive infrastructure upgrades were completed.
“This was very much a pioneering development, and it’s nice to see [Intercontinental’s] vision really taking shape,” said Richards Barry Joyce & Partners principal John P. Barry, whose Boston-based real estate services firm has been listing agent for 226 Causeway St. since the outset. “To have been there on day one when they first began hammering nails and to see where it is now has been very satisfying,” said Barry. “It’s a great asset.”
Indeed, as encouraging as the changes in the North Station and so-called Bulfinch Triangle within that area have been, Barry maintained that the high-end overhaul of 226 Causeway St. was a key reason for the solid tenant response. “The redevelopment was excellent, and has helped make it one of the best quality buildings in that entire submarket,” said Barry, who represented Intercontinental in both the Oxfam and Cleary leases along with RBJ Vice President Thomas Ashe. David Richardson of McCall & Almy negotiated terms for Oxfam, while Ashe and Barry also acted on behalf of Cleary Insurance in its five-year pact.
A global nonprofit working to fight poverty and starvation, Oxfam America will relocate from West Street in downtown Boston later this year. Thomas R. Taranto, Intercontinental’s director of asset management, praised the organization for its work and said his firm is “excited to have an organization that has such a positive global impact move their headquarters to our building.”
Large floor plates should help Oxfam efficiently utilize its space on the fifth floor, said Barry, adding that 226 Causeway St.’s centralized location and access to several public transit lines also factored into the nonprofit’s decision to relocate to the building. Access was also critical to Cleary Insurance, said Barry. The latter tenant will be relocating from within the North Station submarket later this year, moving over from nearby Portland Street.
Acquired by Intercontinental in 2000 for $24 million, the 6-story 226 Causeway St. was transformed into a mix of office space and apartments, the latter facilitated via a 6-story addition to the original building. Intercontinental subsequently sold the residential portion for more than $40 million in 2003, with the new owners converting those units to condominiums. The nearly 200,000 square feet of office space today features such tenants as the Boston Celtics, Companion Health Care, Grant Thornton and the Massachusetts Land Court.
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August 9, 2006
Campanelli sells 20 Walkup to California REIT
Boston Business Journal
Boston Business Journal - 10:20 AM EDT Wednesday
Campanelli Cos. sold a fully leased office and R&D building to Alexandria Real Estate Equities Inc. for $9.4 million.
The building, located at 20 Walkup Drive in Westborough, consists of 113,000 square feet of office, laboratory and R&D space. Braintree-based Campanelli bought the building from Zygo Corp. in March 2005.
Earlier this year RenaMed Biologics Inc. signed a long-term lease for the entire building. The firm is moving to Westborough from Lincoln, R.I.
Richards Barry Joyce & Partners LLC represented Campanelli Cos. in the sale of the building. RBJ also represented Campanelli in its lease to RenaMed and had been the leasing agent for 20 Walkup Drive since Campanelli purchased the building from Zygo Corp. In that transaction, RBJ represented Zygo.
Alexandria Real Estate Equities (NYSE: ARE) is a Pasadena, Calif. based real estate investment trust. The REIT specializes in the ownership, operation and management of office and laboratory property. Campanelli Cos. specializes in the development and management of industrial, office and warehouse properties.
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August 4, 2006
Real Estate Roundup
This summer, why not attend a data center party?
Boston Business Journal
by Michelle Hillman
Journal staff
From Malden to Waltham
Another biotech company is setting up shop in Waltham.
Histogenics Corp. recently signed a 25,472-square-foot lease at 830 Winter St. with landlord Intercontinental Real Estate Corp.
In January 2007, Histogenics will move research and manufacturing operations to Waltham from Malden Hospital, putting it in the middle of a biotech minihub. Waltham is home to about a dozen life science and biotechnology companies that are choosing price over the prestige of an East Cambridge address.
Histogenics signed a 10-year lease and will occupy space along with the building's former owner, Praecis Pharmaceuticals Inc. (Nasdaq: PRCS). Following the Histogenics deal, about 92,000 square feet of shell lab space remains for lease.
In 2005, Intercontinental bought the three-story, 182,106-square-foot lab building for $51.2 million and leased back 65,000 square feet to Praecis. Praecis bought the building, originally developed by KBS Realty Advisors, in 2000 and built out 110,000 square feet, leaving the rest of the building as lab-ready shell space.
The building is getting attention from lab tenants in the market, with at least three others interested in leasing space at the property, said John Varholak of Richards Barry Joyce & Partners LLC which represented the landlord. Histogenics was represented by Congruity Works Inc. Varholak said rents for lab space in Waltham are in the high $30s per square foot with a tenant improvement allowance of $115 to $125 per square foot.
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August 1, 2006
Inner Tech Park Sale Nets $19M
GlobeSt.com
BOSTON-A three-building complex ripe for redevelopment has been acquired by Essex River Ventures in a $19.4 million transaction that bought the new owner a 160,000 sf mixed use property in a prime location along the Charlestown and Somerville line.
The Boston-based buyer faced about seven others in a hotly contested quest for ownership of the brick complex, known as Inner Tech Park, but won out with its high-priced offer to seller Pinnacle Properties, which had placed the asset on the market just six weeks earlier, Richard Bradbury, of Richards Barry Joyce & Partners’ Boston office tells GlobeSt.com.
“It was very competitive,” says Bradbury, who represented the Boston-based seller in the transaction. “Some people were looking at it as a stabilized asset but the ones that had the most interest were looking at it for development.” Bradbury says the complex, located at 52-56 Roland St. in Boston’s Charlestown neighborhood, brought out the competitive edge in buyers because of its location in one of the last remaining areas of the city to see redevelopment. With its stabilized tenant base, its value-added appeal and the potential turn redevelop the property, investor interest was intense, he says.
“Anytime you see the potential for a development opportunity, interest is going to be high,” says Bradbury, noting that the complex also includes one acre of land and lies adjacent to other potential redevelopment sites. “As you look around the inner suburban marketplace, there’s not a lot of sites like this.” Bradbury says it is unclear what the buyer has in store for the complex and no one from Essex River returned calls from GlobeSt.com seeking comment. The firm owns several properties in Boston and the surrounding area, including 186 Lincoln St. and 225 Friend St., both in Boston, and the Lexington Corporate Center in Lexington, MA.
Inner Tech Park, which is comprised of a mix of office, laboratory and research and development space, is about 80% leased by a diverse tenant roster that includes an engineering firm, a non-profit organization and the offices of a gubernatorial candidate.
Pinnacle Properties was represented in the transaction by Bradbury along with Richard Herlihy and Steven Purpura, also with Richards Barry Joyce & Partners. The brokerage team also procured the buyer in the deal.
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July 31, 2006
Telecom Firm Inks 37,200 SF
GlobeSt.com
By Beverly Ford
WESTBOROUGH, MA-West Chester, PA-based telecommunications repair and logistics provider Communications Test Design, Inc. has renewed its lease on 37,200 sf of flex space at 133 Flanders Road in Westborough in a deal that will keep the firm in the 37,200 Flanders Industrial Park building where it has been the sole tenant for at least the last six years.
Paul Leone, with Richards Barry Joyce and Partners’ Boston office, tells GlobeSt.com that the single tenant building suited the firm well and provided a location near both Route 9 and 495, which provided easy access to both Boston and Worcester.
“It’s a very central location, with excellent highway access, and infrastructure enabling it to service many clients in the southeastern New England region,” says Leone.
Terms of the transaction were not disclosed but Leone says similar space in the Westborough area generally leases in the high single-digit price range triple net. Leone and John Lashar, also with Richards Barry Joyce and Partners, represented the tenant, while the property’s landlord, Glenborough Realty Trust, was represented in-house by Sam Potter.
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07.31.06
Essex River Ventures buys Inner Tech Park for $19.4M
Boston Business Journal
Essex River Ventures LLC purchased Inner Tech Park for $19.4 million from Pinnacle Properties.
The property is located at 52-56 Roland Street is located on the Charlestown/Somerville line in Boston and consists of 160,000 square feet of office, laboratory and R&D space. The buildings are more than 80 percent leased.
Richards Barry Joyce & Partners LLC sold the buildings on behalf of Boston-based Pinnacle. It also represented Essex in the transaction.
The downtown Boston market consists of 67.3 million square feet of office space and was 12.6 percent vacant as of the second quarter this year, according to RBJ.
In other RBJ news, the real estate service company was hired to sell 80 Central St. in Boxborough, Mass.
The 149,528 square-foot Class A office building is 92 percent occupied. Tenants in the building include Broadbus Technologies Inc., National Grid Wireless and Crossbeam Systems Inc.
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07.28.06
Region’s Biotech Market Remains Strong
GlobeSt.com
BOSTON-The region’s biotech market is heating up, fueled by an abundance of skilled labor, a strong venture capital market and the many colleges and universities that call Boston home.
In the last year alone, second quarter vacancy rates in East Cambridge, considered the epicenter of the area’s booming biotech industry, has dropped from 26.1% to 9.1%. That trend doesn’t seem to be abating, according to Brendan Carroll, a researcher with Richards Barry Joyce & Partners, a real estate firm that advises life science companies and landlords, tells GlobeSt.com.
“A growing industry requires more space and that’s just what we’re seeing here,” says Carroll. “There’s been heavy demand.”
Several large deals, among them French pharmaceutical maker sanofi-aventis’ recent lease of 73,000 sf of space at 270 Albany St. in Cambridge just blocks from the Massachusetts Institute of Technology, is tightening the market and driving rent rates, says Carroll. That lab space two years ago demanded $45 per sf and is now nearing $60 per sf, about equal to the previous market peak in 2001.
The demand for biotech space in the region is so strong and the rents so high, in fact, that some companies have been forced to look for space as far away as Route 495, about 30 miles from Kendall Square, the state’s life science center.
It’s unlikely that demand will abate anytime soon, Carroll notes, despite pressure from other states to attract biotech firms away from Massachusetts. Fueling that demand, he says, is the region’s large number of research institutions, including the Massachusetts Institute of Technology and Harvard University, along with a skilled workforce and a strong venture capital presence.
“We expect [the demand for biotech space] will grow in other places, but the skill infrastructure that is in place in Boston because of the educational and medical institutions has created an ecosystem that is difficult to replicate,” he says. “That’s a big advantage and one that is difficult to see lessening over time.”
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July 25, 2006
RBJ renews lease
Worcester Business Journal
WESTBORO - Richards Barry Joyce & Partners, LLC corralled a 37,200 square foot lease for Communications Test Design, Inc. at 133 Flanders Road. The firm, a PA-based telecommunications repair and logistics provider, renewed its lease and was represented by John Lashar and Paul Leone of Richards Barry Joyce & Partners. The landlord of the space, Glenborough Realty, was represented in-house by Sam Potter. Richards Barry Joyce & Partners is a full-service commercial real estate firm.
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July 24, 2006
Biotech real estate market heating up;
Demand for lab space is growing
Boston Globe
To understand how dramatically the real estate market for biotechnology lab space has shifted in East Cambridge, look no farther than 675 West Kendall St.
The large glass-paneled research building sits directly across a square from Genzyme Corp.'s sleek, green headquarters. Vertex Pharmaceuticals Inc. signed a lease here for the entire 290,000 square feet in January 2001, while it was under construction. But in the summer of 2004, the completed building still sat empty.
Vertex hadn't made sufficient progress in its drug development programs for hepatitis and cancer, and it had more than enough space in a cluster of buildings closer to Central Square. So 675 West Kendall was vacant, and Vertex was committed to paying $19.2 million in rent for 2004 for a building it didn't need, according to company filings.
To cut its losses, Vertex sublet space in the building, first to Momenta Pharmaceuticals Inc. in fall 2004, then to Genzyme in early 2005. But in May 2005, Vertex released surprisingly positive clinical results for VX-950, its drug candidate for hepatitis C. In the past 14 months, Vertex shares have soared, the company is on a hiring tear, and it has almost filled the remaining space at 675 West Kendall.
``That one building was the biggest swing in the whole market for lab space," said Steve Purpura, a partner at Richards Barry Joyce & Partners, a Boston real estate firm that advises life-sciences companies and landlords. ``Not only did Vertex take that space off the market, there were also some big potential tenants that were looking closely at that building. Now, if you're looking for 25,000 square feet of class A lab space in East Cambridge, you have few choices."
The numbers tell the story: Of nearly 5 million square feet of lab space built in the Kendall Square biotech hub, only 5.1 percent is available for lease directly from building owners. Counting space available for sublease, the number grows to 11.4 percent, said Mark J. Winters, executive director of Cushman & Wakefield, , a real estate firm in Boston. Two years ago, he said, the overall lab vacancy rate in Kendall Square was 26.2 percent.
``It's a very tight market for lab users, which is why we're seeing so much lab demand getting pushed out to Lexington and Waltham," Winters said.
Rents are rising. Winters said that two years ago, lab shell space -- empty space that hadn't been converted into offices and labs to meet a tenant's specific needs -- was leasing for $45 a square foot, plus the tenant's share of the costs of utilities, building operations, and real estate taxes. Now, space is leasing for close to $60 a square foot, Winters said, equal to the previous market peak in 2001.
Rents for office space are also moving up, said Deb Gould, managing director of the Boston real estate services firm Spaulding & Slye.
``Rents for first-class office space at a building such as 101 Main St. are $34 a square foot, compared to about $31 a year ago," she said. ``Those are healthy rents."
Landlords typically give a tenant signing a long-term lease an allowance to help pay for the build-out of offices and labs.
Several large deals have dried up available lab space, the brokers said.
Schering-Plough Corp. , the large pharmaceutical company in Kenilworth , N.J., recently leased an additional 64,000 square feet at 320 Bent St. in Cambridge, bringing total space leased in the building to more than 130,000 square feet. The space accommodates Schering's research institute.
Last year Schlumberger Ltd., a large oil-services firm, leased about 180,000 square feet in East Cambridge for its research headquarters, which had been in Connecticut.
The tightening market is making real estate decisions more complex for some biotech firms.
Elixir Pharmaceutics of Cambridge subleases 21,000 square feet in a building at One Kendall Square that houses the local research operations of California biotech giant Amgen Inc. William K. Heiden, Elixir's chief executive, said he doesn't think Amgen will renew the sublease when it expires next year. He is also looking to move to a larger space.
``We're seeing less out there than we did a year ago," Heiden said. ``There's less inventory, and people are feeling more bullish about the Cambridge market."
Elixir is exploring options in Cambridge and outlying suburbs where it can accommodate offices, research labs, and animal facilities. ``It's a challenge to find that all in one place," he said.
Jeffrey Krasner can be reached at krasner@globe.com.
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July 21, 2006
Kronos adds to campus
Boston Business Journal
Kronos Inc. signed a deal to lease a 51,300-square-foot, two-story office and R&D building bringing its campus to six buildings and 500,000 square feet.
The building is located at 6 Omni Way in Chelmsford, Mass., where Kronos (Nasdaq: KRON) already is headquartered. With the addition of the building at 6 Omni Way Kronos is one of the largest users of real estate on Route 495.
Trammell Crow Co. represented the tenant and Richards Barry Joyce & Partners LLC represented the landlord, Newport Beach, Calif.-based KBS Realty Advisors.
Kronos, a software company, employs approximately 3,000 people and will use the entire building at 6 Omni Way for software engineering personnel.
According to Richards Barry Joyce & Partners, the I-495 North submarket consists of 15, 036,000 square feet of office space and is about 30 percent vacant, as of the quarter ended June 30, 2006.
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June 30, 2006
Local office space filling up: Brokers cite hiring uptick
Boston Herald
Boston’s commercial real estate market is starting to heat up, in another good sign for the area’s long-sluggish economy.
Expansion by companies big and small has taken 749,000 square feet of empty space off the market over the past year in Boston’s Financial District, reports Richards Barry Joyce & Partners.
That, in turn, has brought a vacancy rate that was once well over 20 percent down to 14.6 percent.
Meanwhile, some sections of the once-battered suburban office market are booming, with developers eyeing giant new office parks in the hottest sectors along Route 128.
An uptick in hiring has helped fuel this real estate expansion, the firm reports.
“There are clearly a number of dynamics that are pointing to a strong improvement in the Greater Boston real estate market,” said Robert Richards, president of Richards Barry. “There is clearly a tightening of the market,” he said.
Still, Waltham, not downtown Boston, may be the epicenter of the improving market.
Developers, including Pru Center owner Boston Properties, have begun construction on or are poised to begin building 1.6 million square feet of new office space along Route 128 in Waltham.
That’s enough to fill the Pru tower one-and-a-half times.
And Cambridge is also on a tear, with both tech and biotech firms gobbling up space, Richards Barry reports.
The Cambridge market has only three blocks of more than 50,000 square feet of available office space left, according to the firm. Rents for top office space in the city have risen 17 percent over the past two years, up to over $30 a square foot.
“Cambridge is really booming,” Richards said.
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June 25, 2006
‘Burbs’ buildings gobbled up: Hub towers’ prices spur interest
Boston Herald
Faced with towering prices for Hub high-rises, real estate investors are turning to a tactic that just a few years ago might have had them committed to an asylum.
Buying up half-empty - and sometimes banged-up - suburban office buildings.
Such deals come amid a steady improvement in the long-sluggish local economy that has companies once again hiring - and starting to fill - office parks along Route 128 and Interstate 495.
With downtown Boston prices out of sight, some investors are scooping up suburban fixer-uppers in a bid to get ahead of what they are betting will be a return of the boom times.
It’s not that these firms have lost interest in downtown.
But developers like Gale International, best known for building State Street’s new tower headquarters near South Station, and International Place’s Don Chiofaro, are now also looking to the suburbs for big profits.
One tactic is to buy a vacant building in the path of a big corporate expansion, said Rich Herlihy, executive vice president in the investment sales group at Richards Barry Joyce & Partners.
“We call it elephant-hunting opportunities,” Herlihy said. “You can, in effect, get in the way of a deal.”
In the aftermath of the last recession, investors and developers couldn’t ditch their suburban holdings fast enough.
That flight came as vacancy rates soared to 30 percent and beyond in some markets, emptying out buildings once bustling with Internet or telecom workers.
But vacancy rates, while still high by downtown standards, have begun falling to more down-to-earth levels in the 20 percent range.
Meanwhile, big-name investors are on the prowl, looking for deals. Just take New York-based Gale.
The firm, with joint venture partners Mack-Cali and JP Morgan, recently bought seven suburban buildings in Bedford, Billerica and Andover.
Gale and its partners paid roughly $50 million for 667,000 square feet, more than half the size of the Pru tower.
That was under $80 a square foot, noted Robert Maloney, a senior vice president at Gale who put together the deal.
Some of the buildings in the portfolio need work. And vacancy, now roughly 40 percent, may drop still farther in the short term, he said.
But Maloney is banking on a steady filling up of his firm’s new suburban holdings as the local recovery gains speed.
“We think the suburban market is in for a good, long run,” Maloney said.
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May 4, 2006
Biotech space crunch: Boom times back in Cambridge
Boston Herald
Ravenous biotechnology and drug companies have gobbled up almost all the available research space in Cambridge’s booming Kendall Square, leaving only one sizable lab available for rent in East Cambridge, a new report shows.
The boom times are back, with the amount of available research space left around the coveted lab complexes near MIT having fallen to 9 percent.
That’s down from 28 percent just a little more than a year ago, reports commercial real estate firm Richards Barry Joyce & Partners.
In East Cambridge, where drug- industry heavyweights like the Swiss firm Novartis have set up camp, there is now only one mid-sized block of lab space left - a 33,000-square-foot block on Memorial Drive, noted Robert Richards, the firm’s president.
“When you see that dramatic a downward shift on vacancy rates, it’s time to pay attention,” Richards said.
A booming biotech and drug industry is behind the dramatically tightening lab market, with the market capitalization of Greater Boston biotech firms hitting a record $48.9 billion.
The tight market is giving developers and other landlords free rein to drive up prices, with rents now soaring into the $50-to-$60 a square foot range, up more than 20 percent over the last year or two, Richards said.
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April 28, 2006
RealShare EXCLUSIVE: Large Spaces Are Vanishing
GlobeSt.com
BOSTON-The squeeze is on in Boston’s high-rise office market as large blocks of space vanish amid a tightening market, a panel of experts at Boston’s RealShare conference said. “There’s become a bit of urgency if you’re a high-rise tenant looking for a good amount of space,” David Fitzgerald, executive vice president and partner with CB Richard Ellis, said. “There are tenants looking two and three years in advance” of their lease expiration.
Even if a business can find a large block of high-rise space, tenants are due for some sticker shock. Rents, Fitzgerald said, are on the rise. At International Place, space that not too long ago leased for $40 per sf is now going for $45 to $50 per sf.
“If you want to be in quality space you’re going to have to pay the price,” said Bob Richards, president of Richards Barry Joyce & Partners, who spoke on a leasing panel. Also on the panel with Richards and Fitzgerald were Duncan Gratton, managing director of Equity Office Properties, Jay Doherty, president of Cabot, Cabot and Forbes, and Jack Kerrigan, executive vice president of Grubb & Ellis.
Panel experts said low-rise space is also on the move. At 101 Federal St., recent leases took 100,000 sf off the market, all below the 11th floor, Gratton said. “Last year, that building was struggling.”
Even Cambridge is feeling the pinch since biotech moved into the playing field, says Richards. Rising office rents could price some tenants out of the market forcing them into the suburbs. Gratton cautioned that “once a tenant gets priced out of the market, they don’t ever come back.”
Yet even in the suburbs, leasing can be tricky. “It’s very, very spotty,” Kerrigan said of Boston’s suburban market. Waltham’s market remains hot with 15% vacancy yet there is an enormous amount of inventory remains to be leased. Meanwhile in Littleton, Kerrigan said, one out of three buildings is empty. But in Boston and Cambridge, the tightening market is making owners smile. The bigger demand, after all, can only mean higher rent rates, panel members noted.
The event, which drew about 400 real estate professionals from throughout the area, also featured keynote speaker Janet Marie Smith, the senior vice president of planning and development for the Boston Red Sox. Thomas Alperin, partner and president of National Development, was in the hot seat at the popular “Inside the Real Estate Mind” segment. He sat down with Real Estate Media Network editor-in-chief Michael G. Desiato. The RealShare conference series is produced by Real Estate Media, publisher of Real Estate Forum and GlobeSt.com.
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April 19, 2006
Premium Space Powers Office Market Recovery
GlobeSt.com
BOSTON-Premium space is powering the recovery of Greater Boston’s office market as the flight to quality continues to net positive absorption throughout most of the region, a first quarter report by Richards Barry Joyce & Partners shows. During the first three months of 2006, the Greater Boston office market experienced 1.4 million sf of positive absorption with premium space accounting for 84% of that figure, Brendan Carroll, who prepared the report for RBJ&P tells GlobeSt.com.
Carroll says the figures show that the first quarter of 2006 is the second strongest quarter in terms of absorption during the last three years. “The recovery that is currently in place across the country is expanding demand for services across several lines including financial services.”
Some submarkets, including Waltham, and Boston’s Back Bay and Financial District, are already beginning to tighten as businesses continue to expand. “In certain markets, businesses could begin to become concerned about their ability to accommodate additional staffers in future quarters and you may see some absorption ahead of actual head count increases.”
Waltham experienced 170,000 sf of positive absorption in class A space driving lease rates up an average of 30 cents per sf overall, the report says. The limited amount of premium pace has also sparked a construction boom in the area with more than one million sf of new class A office space currently either under construction or planned.
In Boston, 64% of all absorption in Central Boston occurred in the Financial District and the Back Bay as the demand for quality “premium view” office suites continued to drive that submarket. Seven major projects are also in the planning stages for the Central Boston area, the report found.
But it’s not only the city and suburban markets that are enjoying the leasing boom. The Route 495 submarket is also benefiting with more than two million sf of office absorption in the last seven quarters, accounting for 37% of all the absorption in the Greater Boston market.
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April 19, 2006
Boston Office Market Exhibits Signs of Life
Wall Street Journal
In Boston's generally lackluster office market, a couple of real-estate niches stand out as exceptions: the top floors of skyscrapers in the center city and the premium -- albeit shorter -- properties in the suburban town of Waltham.
The lure of those particular types of properties signals that the Boston office market, which has lagged behind competitors such as New York and Washington, D.C., is beginning a turnaround, says Janice Stanton, senior managing director of analytics for Cushman & Wakefield Inc., a New York-based commercial real-estate-services firm. "You always see a flight to quality at the beginning of a recovery."
"It's the highest-quality properties that are seeing the spikes in rent," says Bob Richards, president of Richards Barry Joyce & Partners, a Boston-based commercial real-estate firm.
Waltham's vacancy rate is still a relatively high 18.7%, but only 9.4% in Class A properties, defined as the most competitive in a market. Similarly, Boston's central business district vacancy is 13%, but space in towers above the 20th floor is under 10%.
Richards Barry Joyce & Partners compared two similarly sized leases signed for the same premium Waltham office building 14 months apart. In the fourth quarter of 2004, the landlords of Bay Colony Corporate Center agreed to give a new tenant three months of free rent. Once tenant improvement costs and other expenses were computed, the net effective rent was $8.95 per square foot. Conditions had changed dramatically by the first quarter of this year, when Bay Colony didn't give up any months of free rent and was able to command net effective rent of $24.50.
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March 30, 2006
Westborough lease set for R.I. medical device maker
Boston Globe
RenaMed Biologics Inc. will lease 113,000 square feet at 20 Walkup Drive in Westborough, according to the real estate firm Richards Barry Joyce & Partners LLC. Richards Barry Joyce represented the landlord, Campanelli Cos. RenaMed, which makes a device to treat kidney patients, is moving from Lincoln, R.I., and will consolidate its headquarters, laboratory, and research and development facilities in the building under a 15-year lease. The move will begin in July. NAI Hunneman Commercial of Boston represented RenaMed. (Thomas C. Palmer Jr.)
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March 15, 2006
Davis buys office portfolio for $24.1M
Boston Business Journal
Davis Investments Ventures Inc. purchased three suburban office buildings totaling 295,700 square feet for $24.1 million. The single-story buildings are located in Marlborough, Mass., and are at 111, 140 and 150-170 Locke Drive. The portfolio consists of office, R&D and flex space and includes tenants such as Sepracor Inc. Motorola, FONS Corp., Allied Printing and Xcellerex. The sale of the property was brokered by Richards Barry Joyce & Partners LLC who represented the seller -- First, Second, Third Marlborough Development Trust -- and procured the buyer, also known as Boston-based Davis Cos. The property is located within the I-495 West submarket, which consists of 17.8 million square feet of office space. The vacancy rate for the market at the end of 2005 was 21.1 percent, according to Richards Barry Joyce & Partners.
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February 26, 2006
LTX signs lease for new HQ
Boston Business Journal
LTX Corp., a semiconductor test equipment company, announced Thursday that it had signed a lease for a new, 56,000-square-foot corporate headquarters location, downsizing from the company's current 167,500 square feet.
LTX (Nasdaq: LTXX) is currently headquartered at 50 Rosemont Drive in Westwood, Mass., and will move to 825 University Ave. in Norwood in July.
February 23, 2006
Manufacturer to move headquarters to Norwood
Boston Globe
LTX Corp., which makes test equipment for the semiconductor industry, plans to move its headquarters from Westwood to Norwood, said LTX's real estate broker, Richards Barry Joyce & Partners. This summer, LTX will move to 56,000 square feet of space in Norwood. Cabot, Cabot & Forbes is the landlord for both sites, said a Richards Barry Joyce executive. Lincoln Property Co. represented Cabot, Cabot & Forbes in the Norwood transaction. (Chris Reidy)
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February 20, 2006
Dana-Farber signs lease in Center for Life Science
Boston Business Journal
Dana-Farber Cancer Institute announced Monday that it signed a lease of 50,000 square feet with Lyme Properties making it the second tenant to lease space in the Center for Life Science.
The building is under construction in the area of Boston known as the Longwood Medical and Academic Area. Dana-Farber will move into the new building in late 2007.
Previously, Lyme and Beth Israel Deaconess Medical Center signed a 360,000-square-foot lease in the 705,000-square-foot research and office building. The building will also include below-grade parking for 300 cars and a multi-story winter garden on Blackfan Street. The Center for Life Science Boston was designed by Tsoi Kobus & Associates of Cambridge and is being built by William A. Berry & Son Inc.
Prominent institutions adjacent to the new building include Beth Israel Deaconess Medical Center, Children's Hospital's Karp Family Research Laboratories, the New Research Building at Harvard Medical School and Merck's Scolnick Research Center.
CB Richard Ellis/New England represented Lyme Properties; Richards Barry Joyce & Partners LLC represented Dana-Farber Cancer Institute in the transaction.
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February 20, 2006
Semiconductor Testing Company LTX Relocating to Norwood
Banker & Tradesman
By Joe Clements
LTX Corp. has found a new home, committing to 56,000 square feet at 825 University Ave. in Norwood. The agreement was inked after the semiconductor testing company was able to terminate a lease at 50 Rosemont Road in nearby Westwood, where it occupies all 169,000 square feet.
“This was a great solution for LTX,” Richards Barry Joyce & Partners principal Michael Frisoli said last week after he and RBJ associate Cal Hudak negotiated both the termination and new lease on behalf of the tenant. The two were initially retained to sublease unneeded space at 50 Rosemont Road for LTX, but the idea was eventually formulated to relocate the company into 825 University Ave., which is owned by the same partnership of Commonfund Realty and Cabot, Cabot & Forbes.
Landlords often would be loathe to accept such a downsizing, particularly having a deal in place running late into 2009, but Frisoli explained that the scenario worked for all involved because LTX’s current headquarters is in the heart of a planned redevelopment of Westwood’s University Avenue area by Commonfund and CC&F. The plan calls for shifting the landscape there from commercial and industrial buildings into a swath of residential and retail uses, with one source maintaining that 50 Rosemont Road will be razed upon the tenant’s departure this summer. Terms of the Norwood lease were not released, but one source said it is a 10-year agreement with per-square-foot rents in the mid-teens.
Besides fitting into a more appropriate facility, enjoying a substantial savings in rent and being close enough to accommodate existing employees, LTX will also be relocating into newly renovated space following an extensive build-out now under way, noted Frisoli.
“It is going to be a world-class, state-of-the-art headquarters,” he said.
‘A Lot of Reasons’
Lincoln Property Co. Senior Vice President Austin Smith, who represented the landlord in the 825 University Ave. deal, estimated that the build-out will be approximately 75 percent to 80 percent office and the remainder manufacturing space for LTX’s testing requirements. A fresh facade and signage will be provided to give the tenant a solid corporate image, said Smith, while the renovation will include new windows for the single-story structure. Completed in 1981, 825 University Ave. was once the home of Jet Spray Inc. until CC&F and the Commonfund acquired it in 2003 for $10.7 million.
The LTX pact will bring 825 University Ave. to full occupancy, according to Smith, who represented the owners last year in leasing the other piece of the 165,000-square-foot property to Instron Corp. Smith said the building has enjoyed solid tenant interest, partly due to the property’s own qualities, but also feeding off a wave of leasing activity in the Norwood area.
“There are a lot of reasons Norwood makes sense for companies,” Smith said, including a skilled labor force, quick access to Route 128 and a reverse commute on that oft-clogged beltway. The nearby Upland Woods business park by the Campanelli Cos. of Braintree also has been well received, Smith noted, as evidenced by a 135,000-square-foot lease to Aspect Medical announced earlier this month for the one-time Polaroid Corp. campus. According to year-end 2005 figures by RBJ, the Route 128 South office submarket that includes Norwood has a 15.5 percent vacancy rate.
While the LTX transaction completes the leasing campaign for 825 University Ave., 23 acres of the 49-acre complex is available to accommodate another 250,000 square feet of new construction, and Smith reported an encouraging response among prospects considering a build-to-suit scenario. “It bodes well,” said Smith of the recent activity, citing a pro-business attitude in the community as another plus for getting a project off the ground.
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February 16, 2006
National Development sells Franklin Building
Boston Business Journal
National Development has sold 125 Constitution Blvd. in Franklin to W.J. Connell Co. for $8.1 million.
Richards Barry Joyce & Partners LLC represented the seller and Cushman & Wakefield of Massachusetts Inc. represented the buyer. The sale of the 134,133-square-foot building closed in January.
W.J. Connell, a power equipment company, moved its corporate headquarters from 65 Green St. in Foxborough and operations from New Jersey to the former Dunkin' Donuts distribution site in Franklin three weeks ago. It is also in the process of selling its 50,000 square-foot Foxborough building, according to published reports.
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February 13, 2006
Suburban Successes From 2005 Spill Over to the Western Front
Banker & Tradesman
By Joe Clements
Fads and weather systems tend to migrate into New England from the west, but the opposite is true for suburban Boston’s economic fortunes, and as 2006 begins, it appears the gains seen last year in Lexington, Waltham and the Framingham/Natick markets are finally trickling outward to Interstate 495, especially in the central strip between Route 2 and the Massachusetts Turnpike.
“The news is good in the ‘boroughs,’” said Scott R. Hughes, president of New Dover Assoc. and a veteran real estate broker covering such communities as Marlborough, Northborough and Westborough, also known as the Interstate 495 West submarket. “We’re getting really strong activity right now.”
Several substantial leases have been signed in recent weeks, reinvigorating an area that initially began to stabilize in 2005 after a rough beginning to the new millennium. According to Spaulding & Slye, there was 262,000 square feet of positive net absorption in the submarket last year, despite minus-37,000 square feet of absorption in the last three months. Spaulding & Slye put the office vacancy rate at 15.5 percent, similar to Hughes’ estimates. Using a larger sampling than Spaulding & Slye, which tracks 12.1 million square feet, Meredith & Grew reported a 23.9 percent vacancy rate for the 17.8-million-square-foot submarket and also showed a fourth-quarter dip of minus-52,000 square feet in absorption. For the year, I-495 West had 467,000 square feet of positive net absorption, Meredith & Grew indicated.
By any measure, conditions have improved, Hughes relayed, citing a greater pulse from the technology sector as one reason, with more venture capital available to fuel fresh business ideas. The tighter conditions in other suburban communities are helping as well, said Hughes, noting that Framingham and Natick companies such as Bose, the TJX Cos. and Boston Scientific have spread their corporate wings out toward I-495 West of late as space options in their markets dry up.
I-495 West also has been steadied internally, as exemplified by such local players as Sepracor, National Grid and Broadbus Technologies signing new leases in early 2006 that represent expansions. In Boxboro, for example, Broadbus grew from 28,000 square feet into 49,000 square feet at 80 Central St., while National Grid Wireless is moving from Westborough into a 22,000-square-foot block in that building as well.
Broadbus mulled other options but stuck with 80 Central St. due to its “location, image, growth flexibility, amenities and existing infrastructure to support electronic labs,” said Richards Barry Joyce & Partners Vice President James Lipscomb, who worked with RBJ principals Brian McKenzie and John Wilson on that transaction, representing both the tenant and the owner. RBJ was also broker for the landlord in the National Grid negotiations, while Rob Walles of CBRE/New England was agent for the tenant.
RBJ further assisted two landlords in Marlborough as they signed Sepracor to deals totaling nearly 100,000 square feet. The life sciences company took more than 71,000 square feet at 111 Locke Drive in a renewal with Park Development Group, and leased another 25,000 square feet at nearby 33 Locke Drive, owned by Northland Investment Corp. of Newton. Sepracor was represented in both leases by Joseph Fallon and Eric Foster of Trammell Crow Co. RBJ principals Michael Frisoli and John Lashar and Vice President Paul Leone handled the assignments for both landlords.
“The I-495 West submarket continues to show signs of improvement,” Lashar said in announcing the Marlborough deals. A skilled lab
