The May Institute has committed to leasing all of 41 Pacella Park Drive, a single-story, 80,000-square-foot structure at which the Norwood-based organization plans to locate a school for students afflicted by autism. The deal was brokered by Cushman & Wakefield of Massachusetts.
Providing a measure of momentum for Greater Boston’s commercial real estate market, two leases of 80,000 square feet each were signed last week, with one deal bolstering the industrial sector and the other removing a Randolph office property from the suburban south region’s bloated inventory.
In the latter agreement, the May Institute committed to all of 41 Pacella Park Drive, a single-story structure at which the Norwood-based organization plans to locate a school for students afflicted by autism. Owned by Atlantic Management of Framingham, 41 Pacella Park Drive was renovated from industrial to office space during the technology boom on behalf of tenant Network Plus, but has been empty for the past year. Both the May Institute and the landlord were represented by Cushman & Wakefield of Massachusetts brokers Cathy Minnerly and J.P. Plunkett.
According to Plunkett, the May Institute considered several options in the area before settling on 41 Pacella Park Drive for a combination of reasons, including a central location, efficient layout and a site featuring both substantial parking and a vast amount of outdoor space for students to utilize. “It’s a very tranquil place,” Plunkett explained last week, adding, “We’re delighted that this great organization, which does so many amazing things for kids, can take advantage of such a nice property … it works really well for them.”
The Randolph lease runs for 10 years, as does a second major suburban deal completed last week that also involved Minnerly and Plunkett. In that instance, the pair teamed up to represent HRPT Trust of Newton in leasing 80,000 square feet of office and warehouse space at 165 University Ave. in Westwood. CLS Electrical Supply will use the building as a regional distribution center, with the Connecticut-based firm relocating a similar operation in Dedham to the new property. Christopher Everest, president of Nordlund Assoc. of Newton, acted on behalf of CLS Electrical in that assignment.
CLS has been looking for a new Massachusetts facility since the spring, according to Everest, with 165 University Ave. emerging as the ultimate winner due to solid visibility and the building’s ability to meet the tenant’s physical needs. As with the May Institute, CLS explored various options before settling on its final choice, although Everest said he was pleased by the pace of the space search. “For that size requirement, it moved pretty quickly,” he said. “It worked out well for everybody.”
Industrial properties have seen their share of difficulty in recent months, with Richards Barry Joyce & Partners estimating that the Bay State’s warehouse market suffered 502,000 square feet of negative absorption in the third quarter, hiking vacancy 1.1 percent to 19.1 percent. Even so, warehouse/distribution rents have been rising slightly throughout 2004, reaching an average of $6.30 per square foot at present.
‘Generally Encouraging’
In his report, RBJ&P Director of Research Brendan Carroll called the third quarter “generally encouraging” for the warehouse market, with the negative absorption situation created mainly by three large move-outs of tenants that resulted in 1.1 million square feet of new vacancies. The largest of the departures was Stop & Shop’s anticipated departure from its Readville facility, with the firm leaving 770,000 square feet of space as part of its relocation to the South Coast region. In Clinton, Regency Transportation vacated 230,000 square feet, while Boston Interiors relocated into a 120,000-square-foot, custom-built facility in Stoughton.
Tenant demand actually was rather robust in the third quarter, according to RBJ&P, which noted such deals as an 86,000-square-foot warehouse lease to Southworth-Milton in Milford; Relizon’s leasing of more than 51,000 square feet in Westborough and a 46,000-square-foot commitment by Owens & Minor in Franklin.
Another encouraging sign going forward is the lack of new industrial construction in the pipeline, with no new product under way along Route 128 and just 819,000 square feet being built in the Interstate 495 belt, headlined by the Gutierrez Cos. developing two Northborough industrial buildings on a speculative basis. Half of the 260,000 square feet being developed at 55 Lyman St. is already leased to McKesson Corp. According to sources, the Northborough properties have been so well received that Burlington-based Gutierrez is supposedly in negotiations to sell the buildings to Invesco Corp.
Calls to Invesco and Gutierrez Co. officials to discuss the rumors were not returned by press deadline, although sources insisted that a deal is in the works.
As for the industrial market in general, Plunkett and Everest both said they have been encouraged by leasing velocity in recent months. “The market is suddenly pretty active,” said Plunkett. “It has picked up in a big way since the start of [autumn], and I think it’s only going to get better.”
A former principal with GVA Thompson Doyle Hennessey & Stevens, Everest said he has also noticed an improved leasing environment on both the industrial and office fronts. “I think 2005 is going to be a good year,” he predicted.
