Avaya Inc., a New Jersey-based business software firm that currently occupies space in Concord, has agreed to an 80,000-square-foot lease at 150 Apollo Drive in Chelmsford. The space also will house sister company Spectel Inc., which will vacate its home in Andover.

Providing a harsh welcome for the new owner of Concord’s 300 Baker Ave., longtime tenant Avaya Inc. is moving out, with the business software concern committing to lease all 80,000 square feet at 150 Apollo Drive in Chelmsford. The regional headquarters for the New Jersey-based company will also house employees from Spectel Inc., an Andover-based audio conferencing firm acquired by Avaya last autumn.

“That’s got to hurt,” one industry observer said of Avaya’s pending departure from 300 Baker Ave. Predecessor Lucent Technologies first leased space at the property in 1997 before spinning its Avaya division off as a separate company in 2000. Previously owned by SSR Realty Advisors, 300 Baker Ave. was purchased in October by Spear Street Capital. The San Francisco-based private equity fund paid ahefty $44 million for the 408,000-square-foot building, which at the time was considered a stable asset for the suburban Boston office market.

While a difficult outcome for Spear Street Capital, Avaya’s lease at 150 Apollo Drive is a major coup for Farley White Interests LLC, a Boston developer that constructed the building five years ago and enticed Sycamore Networks Inc. to rent it as the firm’s headquarters beginning in March 2000. Sycamore earlier this month completed a termination agreement with Farley White in which it agreed to pay more than $300,000 to end the deal several months early. That cleared the way for the lease with Avaya Inc., which is slated to occupy the empty three-story building by mid-summer.

“We’re thrilled,” Farley White principal John F. Power told Banker & Tradesman last week. Avaya is “a great company, and we’re looking forward to having them as a tenant.”

The centralized location of 150 Apollo Drive played a role in the building’s selection, explained CBRE/Whittier Partners principal Mark Reardon, whose firm conducted an extensive space search for Avaya. The Chelmsford address should ease the upheaval of uniting the Concord and Andover operations, said Reardon, who worked on the lease with CBRE principal Robert Walles and Vice Presidents Jason Levendusky and Matthew Flaherty.

Other factors influencing the decision, according to Reardon, included 150 Apollo Drive’s efficient layout, substantial technology infrastructure added by Sycamore and a range of on-site amenities. “It’s a beautiful building,” said Reardon, who called the five-year agreement “a great deal for everybody involved.”

“It just shows that if you build good product, it will attract companies,” said Reardon, with the contract exemplifying the recent flight-to-quality trend that has seen better office properties draw the lion’s share of leasing velocity.

‘A Big Loss’

The Avaya lease is just one of several significant suburban office transactions brokered by CBRE/Whittier of late, with Reardon and Levendusky having also negotiated a 60,000-square-foot lease for Cynosure at 5 Carlisle Road in Westford. “We’re seeing some good activity,” said Reardon, including an encouraging volume of prospects at 295 Foster St. in Littleton. The team of Levendusky, Walles, Reardon and CBRE/Whittier principal Christopher Tosti already brokered three recent deals at that property and another one is ready for signature, accounting for nearly 50,000 square feet of leases, Reardon estimated.

CBRE/Whittier also will take on another assignment as a result of the Chelmsford transaction, having been retained to sublease the approximately 30,000 square feet that will be left behind by Spectel at 200 Minuteman Road in Andover. There are a few years of term remaining on the space, said Reardon, who predicted it will attract potential users.

Reardon declined comment on 300 Baker Ave., while efforts to contact Avaya and Spear Street Capital officials by press deadline were unsuccessful. Also unavailable were officials at Trammell Crow Co., which is serving as leasing agent and manager for the property. It is unclear what the current vacancy rate is at 300 Baker Ave., but sources estimated that Avaya was occupying about 120,000 square feet there after having been up to approximately 150,000 square feet at one point.

One source familiar with 300 Baker Ave. said the property is well run and functionally sound, but claimed the building is disadvantaged by not being located closer to major thoroughfares such as Interstate 495. “That gets overlooked in a tight market, but when there are lots of other [more accessible] options for a tenant [to consider], it can be an issue,” said the broker. Another source maintained that Spear Street Capital “fought hard” to retain Avaya and called the tenant’s departure “a real blow” for the landlord.

“They absolutely wanted to keep them,” said the source. “It’s a big loss.”

Originally constructed in the 1950s as the home of GenRad Inc., 300 Baker Ave. was converted into a multi-tenanted commercial building by Hall Gillespie Inc., which paid $6.25 million for the building in 1996. Hall Gillespie subsequently attracted Lucent to the building, with the technology firm originally signing a 90,000-square-foot pact with a 90,000-square-foot option. The developers then sold 300 Baker Ave. to SSR Realty for $47.7 million in 1999.