PNL Cos. plans to sell the InWood Office Park property on the Woburn/Reading line, which has been approved for development of about 865,000 square feet of Class A office space.

So near, yet so far. In many ways, that could be the legacy for Edward Callan and his failed effort to develop the InWood Office Park on the Woburn/Reading line.

The Texas oilman who successfully created the Edgewater Office Park in Wakefield in the 1980s has been pushed out of the InWood project, with his Dallas-based financier recently taking control of the 57-acre parcel. The PNL Cos., headed up by a former Harvard Business School graduate, is now seeking buyers for the property that Callan has spent the past four years trying to develop.

PNL President David M. Porter said last week that the major problem blocking InWood’s progress was the timing, with the once-hot office sector turning cold so quickly that the development was caught in the middle. Exacerbating the situation was a prolonged permitting process with the city of Woburn, one which made it difficult to market the property while the approval issues were being negotiated. That has now been all but resolved, said Porter, with InWood now permitted to accommodate more than 865,000 square feet of Class A office space.

“It’s ready to go,” said Porter, noting that Callan was able to get the infrastructure for the complex built out during the permitting effort. Although it is unlikely there will be enough demand to kick the project off at present, Porter said he believes that InWood has a leg up on other land sites once conditions do improve.

“It’s not a question of when and if, it’s when the market recovers, and once it does, this is one of the first sites that’s ready to go,” he said. “It’s really a super location.”

Callan, reached Friday on the West Coast, said he has been retained as property manager of InWood. As with Porter, he expressed optimism that the development eventually will prove successful, but agreed that conditions deteriorated so quickly that InWood was doomed to move forward in the current cycle.

“The market collapsed on us,” he said. “I never thought it could change that fast.”

While praising the cooperation of the various civic officials, Callan said the need to gain zoning approval from three separate communities – Woburn, Reading and Wilmington – caused additional delays, while there was also a need to coordinate approvals through several state agencies. Despite InWood’s struggles, Callan said he continues to believe in its strengths, including a prominent location that should give strong corporate visibility along Interstate 93. The ownership is also working closely with transportation agencies, Callan said, to see if access to the parcel can be improved. At present, InWood cannot be reached directly from the interstate.

Porter concurred that the mile of frontage along Interstate 93 is a prime draw for InWood. And while it does not have any other holdings in Massachusetts at present, he said his nine-year-old firm is always looking at opportunities locally. “We’re very bullish on Boston,” said Porter, who lived in the Bay State for 14 years before relocating to Texas.

‘The Next Wave’

PNL’s Web site boasts of the company as a “purchaser of problem assets,” with the company’s specialty focused on working out Class B and C distressed commercial loans and real estate. Individual assets owned range from $250,000 to $25 million. The firm most recently acquired a complex in Fort Worth, Texas, which will soon be losing its major tenant. Other holdings include a 96,000-square-foot shopping center in Miami, a 118-room hotel in Tulsa, Okla., and a 2,300-acre land site touted as the largest development tract in Dallas.

Some sources have said PNL is already shopping the InWood site for sale. Porter acknowledged that the company has been entertaining offers, adding that the ultimate plan is to dispose of the parcel. “We are not big office park developers,” he said. “We might develop a couple of buildings to kick it off, but that would be the extent of it.”

Whether InWood trades over the short term will be a function of investor/developer interest, Porter said, with PNL willing to carry the site if a satisfactory deal is not hammered out in the current environment. Land values can fluctuate greatly in an evolving market, and Porter said PNL believes enough in the site and the market overall to ride out the current difficulty.

“We love the property,” he said. “And when the next wave of development comes, it will definitely wash up at InWood Park.”

The Woburn/Wilmington office market has certainly evolved greatly since Callan originally tied up InWood in the mid-1980s. Once dominated primarily by industrial facilities, a slew of Class A office development has been added in recent years, including Unicorn Park in Woburn and a massive mixed-use complex across Interstate 93 that has become a Mecca for high-tech tenants.

Callan is best known for beating the odds at Edgewater, overcoming potential environmental hurdles to construct three buildings on a 132-acre site. He then deftly sold out his interest for a reported $100 million just before the market cratered in 1987. Callan had actually sold InWood during that period, but was later able to exercise a right-of-first-refusal option and reacquire the property in 1998.

Callan Out, Buyer Sought for InWood Park

by Banker & Tradesman time to read: 4 min
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