JAMES THOMSON
‘A very good building’
As the dog days of August hit full force, the Greater Boston office market appears to be taking a late-summer break, but there is at least one positive aspect to savor in the suburban region, with a major lease in Chelmsford providing a boost to the region’s long-suffering technology sector.
Representing one of the bigger Massachusetts transactions of 2006, Aspect Software has committed to nearly 130,000 square feet at 300 Apollo Drive, a 3-story, 290,000-square-foot office/flex building situated on a 26-acre parcel close to the intersection of Route 3 and Interstate 495. The 21-year-old property is owned by USAA Real Estate Co. of Texas.
“It’s a very good building,” said Cushman & Wakefield Executive Director James Thomson, who negotiated the agreement on behalf of the tenant along with colleagues Torin Taylor and Sue Rosen. Thomson and Taylor work out of Cushman & Wakefield’s Boston office, while Rosen is based in Chicago.
Thomson declined to discuss specifics of the agreement such as the rental rate, but industry sources reported that the deal runs for 10 years. Aspect will consolidate operations from two nearby buildings, 2 Elizabeth Drive in Chelmsford and the firm’s current headquarters at 6 Technology Park Drive in Westford. The company, which expects to relocate to 300 Apollo Drive by next January, will occupy all of the second floor and approximately 30,000 square feet of space on the first, according to Thomson, adding that the deal includes options for future expansion at the building to accommodate growth anticipated by the high-flying technology firm. Focused on the so-called contact center industry, Aspect Software was created last September following the $1 billion merger between Aspect Communications and Concerto Software.
Efforts to contact the tenant and USAA Real Estate officials to discuss the Chelmsford pact were unsuccessful by Banker & Tradesman’s press deadline, but Thomson acknowledged that the lease agreement has been consummated following several weeks of negotiations. Aspect had considered a range of alternatives in the I-495 North region, Thomson said, explaining that 300 Apollo Drive ultimately proved to be the most appropriate choice for a variety of reasons.
“It really meets all of their needs,” he said, citing such attributes as a 400-seat cafeteria, fitness center and accompanying locker room facilities and a generous parking ratio of nearly five spaces for every 1,000 square feet leased. The location is also close enough to the firm’s existing operations to prevent disruption of its employee base due to the move, Thomson noted.
‘Lazy’ Environment
As for the suburban office market in general, Cushman & Wakefield broker David J. Pergola described the current leasing environment as “lazy,” but maintained that the torpid tone is likely a temporary situation. Prior to the beginning of the summer season, Greater Boston had seen a continuation of the momentum which carried over from 2005, with several substantial leases completed prior to midyear. Among the bigger deals tendered north of Boston in recent months included Nuvera Fuel Cells taking 110,000 square feet at Rivertech Office Park in Billerica, a 51,000-square-foot lease by Kronos Inc. at 6 Omni Way in Chelmsford and TRC Environmental Corp.’s 41,000-square-foot commitment at 650 Suffolk St. in Lowell. Raytheon Corp. also was active in the area, leasing close to 200,000 square feet on Technology Park Drive in Billerica in multiple leases tendered by Pergola and colleagues at his former firm, Meredith & Grew.
As for the market malaise, Pergola described the environment as “typical” for the season. “We do usually see a slowdown in July and August,” he said. Both Pergola and Thomson voiced optimism that the surge of deals enjoyed to begin the year will return in earnest after Labor Day. “There are a lot of big requirements still out there, and they are going to have to land somewhere,” said Thomson, especially those firms whose current leases are nearing completion. Among the companies that have been circulating in the Route 3 and Interstate 495 North submarkets this summer include Motorola, iRobot and IBM, all sporting space needs exceeding 100,000 square feet.
In his midyear report, CBRE/New England research director Matt Pullen described the suburban scene as “flat,” but did indicate a number of positive trends, including the 11th straight quarter of positive net absorption for the entire suburban market. Meredith & Grew estimated more than 343,000 square feet of positive absorption in the I-495 North office submarket, which encompasses 24.2 million square feet of space. Despite that encouraging level of velocity, however, the vacancy rate for I-495 remained high at midyear, with Meredith & Grew putting the figure at 25.8 percent, the highest mark for any I-495 submarket and well above the overall suburban average of 20.8 percent.
Even with the recent slide in leasing and the voluminous amount of space that remains available in the suburbs, confidence does appear high toward continued improvement, a sense underscored by the robust investment sales pace that has not seen any substantial drop-off during the summer. “We are bullish,” said Gale International principal Robert Maloney, whose firm recently joined forces to acquire a six-building, 667,000-square-foot office/flex portfolio in Andover, Bedford and Billerica. “We think the suburban leasing market will continue to be active,” said Maloney, whose company is among several well-known players making inroads in the northern area of the state this year.
