Equity Office Properties reportedly is putting the Crosby Corporate Center in Bedford up for sale.
Plenty of holes remain in suburban Boston’s Northwest commercial real estate market, but a couple of major blocks of space are being taken out of circulation via six-figure subleases to Sonus Networks and Raytheon Inc. Sonus will take all of 7 Technology Drive in Westford from Teradyne Inc., while defense giant Raytheon Co. reportedly is expanding to 185,000 square feet in Billerica in two buildings leased to Nortel Networks.
In another development just now occurring in the Northwest submarket, Equity Office Properties is said to be putting the Crosby Corporate Center in Bedford up for sale. Trammell Crow Co. has been retained to sell the asset, according to one source, although neither EOP nor Trammell Crow officials responded to inquiries on that situation by Banker & Tradesman’s press deadline.
Information on the subleases also was not entirely available, despite insistence among several sources that the separate transactions are in place. “We do have an agreement,” Meredith & Grew Senior Vice President David J. Pergola said last week of the 130,000-square-foot Westford property, for which his firm represents Teradyne. Pergola and his father and Meredith & Grew colleague David L. Pergola and Matthew S. Adams are not only handling that assignment, but also are brokers for Nortel on its subleases to Raytheon, in conjunction with Fisher & Co. of Dallas.
Two lease agreements have been signed at Nortel, David J. Pergola also confirmed, although he would not identify the prospects in any of the cases. The Westford and both Billerica buildings – 600 and 880 Technology Park Drive – are owned by the Gutierrez Cos. of Burlington, which must first sign off on the subleases. Officials at Gutierrez did not respond to press inquiries by Banker & Tradesman’s press deadline, but one source maintained that the landlord will accept the leases.
“That should not be a problem at all,” said the source, who indicated that both Sonus and Raytheon are committing to terms in excess of five years in their respective pacts. Raytheon will occupy the first and second floor of 880 Technology Park Drive, encompassing 65,000 square feet, and will expand into 120,000 square feet at 600 Technology Park Drive, a building where it currently occupies about 40,000 square feet.
Already based in Westford, Sonus is being represented in its negotiations by the Staubach Co. That assignment is headed up by Neil Ross, who was unavailable for comment. Raytheon Inc. is represented by Lenny Owens of McCall & Almy, who declined on Friday to acknowledge that his client has signed the two newest subleases with Nortel.
‘A Beautiful Building’
Owens also reportedly represented Raytheon in another major lease in Waltham, a 105,000-square-foot agreement reported in last week’s Banker & Tradesman. Since moving its headquarters from Lexington to Waltham in 2003, Raytheon has been expanding aggressively throughout suburban Boston, including taking more than 400,000 square feet at the Metro North Corporate Center in Woburn.
Although he would not provide specifics, David J. Pergola said the subleases in Billerica and Westford represent the continued flight-to-quality trend prevalent in Greater Boston’s commercial real estate market since the market recovery began nearly three years ago. “That’s just a beautiful building,” he said of the 3-story Westford building, a property Teradyne took over last summer following a corporate merger with the tenant. Similarly, David J. Pergola said, the Billerica space is high-grade Class A space, with the technology firm investing heavily into the buildings prior to retrenching amid the regional economic crash.
Job growth continues to be a concern in Massachusetts, said David J. Pergola, but he added that the Route 3 corridor and other parts of the Northwest office market have begun to see activity between Burlington and Chelmsford. “January was a very strong month,” he said. “Now it’s just a question of continuing that into the spring, but right now, I’m pretty encouraged.” Smaller to mid-sized tenants have been plentiful, he said, while other industry observers say there are a few larger requirements circulating as well.
Among other groups, the Mayo Clinic is said to be seeking upward of 50,000 square feet in the Route 3/128 area, while Copyright Clearance is supposedly seeking a similar amount of space. That firm is currently located at the Tower at Northwoods in Danvers, but one source claimed the tenant is willing to consider communities throughout the northern submarkets and possibly out to Interstate 495.
The region certainly has plenty of possibilities remaining despite the substantial deals taking off the buildings in Billerica and Westford. According to Trammell Crow Co., the 495 North corridor has among the highest office vacancy rates in Massachusetts at 27.0 percent, even after nearly 200,000 square feet of net positive absorption in 2005. The average asking rental rate of $18.09 is also lowest among the eight suburban submarkets tracked by Trammell Crow, and well below the overall suburban average of $21.02 per square foot.
Given its proximity closer to Route 128, plus the park’s quality, Crosby Corporate Center should be able to overcome the submarket’s weak fundamentals in attracting potential investors, according to some observers. “It should get a lot of attention,” one broker said last week of the 50-acre park, which has nearly 600,000 square feet in nine buildings. Equity had put Crosby Corporate Center on the market two years ago, also through Trammell Crow, but ultimately pulled it off the block for reasons never publicly explained.
