Bose Corp., based at this facility in Framingham, has reportedly agreed to lease 300,000 square feet of space at a former Compaq Computer campus in Stow.
In a mega-deal that would kick off the 2003 office leasing market with a badly needed boost, the Bose Corp. has reportedly agreed to lease up to 300,000 square feet at a former Compaq Computer corporate facility in Stow, sources told Banker & Tradesman last week.
“I’ve heard they have signed a letter of intent to go there,” said one source, a notion supported by other industry professionals. Framingham-based Bose is being represented by Leonard C. Owens of McCall & Almy, who declined to discuss the matter, citing client confidentiality. Also not commenting was Kevin C. Hanna of Cushman & Wakefield, listing broker for the sprawling Stow complex. The property is now owned by HP Computer following its acquisition of Compaq last year.
Interestingly, Bose is not the only thriving Framingham-based conglomerate with its eyes toward the Interstate 495 portion of MetroWest. Sources claim that clothing giant TJX Cos. is also seeking 300,000 square feet of office space, a search that apparently is homing in on the Marlborough submarket. Among the sites that TJX supposedly has considered is the former 3Com campus acquired by Berwind Property Group last month for $58 million.
TJX broker Christopher Tosti, a principal with CB Richard Ellis/Whittier Partners, would not comment on the situation, even refusing to say whether his client is out in the MetroWest with the large lease requirement. But other sources insisted such is the case. “That’s absolutely right,” said one suburban broker. The source added that both Bose and TJX are being pushed farther away from their home base due to the lack of contiguous space for any six-figure lease in their corporate backyards.
“There’s nothing left over 100,000 square feet in Framingham or Natick,” said the broker. The scarcity of such large blocks has already prompted other Framingham firms to migrate operations elsewhere, as exemplified in Genzyme Corp’s lease of 85,000 square feet last year in Westborough. Besides the availability of space, with several large blocks currently being peddled by developers and high-tech firms such as EMC Corp., the I-495 MetroWest market is also valued for having a plentiful supply of skilled workers, said Hughes Properties Corp. President Scott Hughes.
Companies “are going west because they recognize they have great highway access and a huge employment base,” Hughes said. “We’re seeing a lot of activity right now.”
The 5.4 million-square-foot Framingham/Natick market has also been popular in recent years, emerging from a problematic stretch in the early 1990s to achieve rents comparable to the more established Route 128 region. But Framingham/Natick is only slightly more than half the size of the 9.4 million-square-foot I-495/Massachusetts Turnpike West market, keeping opportunities there limited.
I-495 MetroWest was battered by the high-tech collapse, and Hughes said the area would welcome strong consumer goods-oriented firms such as Bose and TJX. Genzyme Corp. is also reportedly seeking additional space, albeit a fraction of the other two requirements. Life science companies are increasingly embracing the I-495 MetroWest region, said Hughes, as well as financial services firms such as Fidelity Investments.
According to year-end 2002 figures by CB/Whittier, Framingham/Natick currently has a vacancy rate of 9.7 percent and an availability rate of 13.7 percent. I-495/Mass. Pike, meanwhile, has a 13.7 percent vacancy and a 19.4 percent availability rate. Rents are substantially lower in the outer sector, with CB/Whittier estimating that I-495/Mass. Pike average asking rents are $21.71 per square foot, compared to $25.88 per square foot in Framingham/Natick. Both areas did see negative absorption in 2002, with Framingham/Natick in the red by 524,000 square feet and I-495/Mass. Pike at negative 1.37 million square feet.
TJX Marks the Spot
As for reports about TJX and the 3Com park, leasing broker Kevin P. Malloy of Lincoln Property Co. declined comment, explaining, “We don’t talk about companies that are out looking.” Berwind is currently marketing 332,000 of the existing 531,000 square feet on the site, said Malloy, while a second phase of buildout could create another 650,000 square feet. In any event, sources insisted that the sprawling campus was at a minimum on the map of the TJX property tour. One source even claimed that the two sides were close to a deal at one point, but it is unclear what the status is at present. With an estimated 550,000 square feet of available space, the 3Com park would certainly be able to accommodate any TJX need.
Another likely candidate for a large user would seem to be 55 Fairbanks Blvd. in Marlborough. Previously occupied by Lucent Corp., the three-building campus was acquired last summer by local investors Ian S. Gillespie and Denison M. Hall. Gillespie declined last week to discuss what tenants have looked at the campus, but did say he is encouraged by the level of leasing interest in the park, estimating that there is at least one serious tour per week. The property has already inked two deals totaling nearly 35,000 square feet.
Activity “has been surprisingly consistent,” Gillespie said. “It has been much more than we expected.”
The Fairbanks Boulevard parcel includes 500,000 square feet of existing space and development rights for another 500,000 square feet. Having bought the park at well below replacement cost, Gillespie said the ownership can be patient in waiting for the right deal to come along, unlike some competitors who may be forced to bargain. The Fairbanks Boulevard property sold for $55 per square foot, for example, compared to nearly double that for 3Com.
“You look for value and you try to buy it, and I think we bought value,” Gillespie said. As for the market, Gillespie agreed that the employee base is a major plus in attracting companies, with a natural progression of workers moving from downtown Boston and Cambridge to work for high-tech concerns in MetroWest. “They used to ride their bicycles in Cambridge and now they want to have a picket fence in the suburbs,” said Gillespie. “The result is we have an extraordinary knowledge pool [in MetroWest] for technology and biotechnology … We are right in the middle of a resource as [precious] as the Alaskan oil fields.”
