Hobbs Brook Management last week held a topping-off ceremony for 701 Edgewater Drive in Wakefield, the company’s second building in the Edgewater Office Park.
Confidence has been an element sorely absent from the commercial real estate industry of late, but such was not the case last week in Wakefield, where Hobbs Brook Management was topping off its second new building at the Edgewater Office Park. While threatening skies seemed to aptly reflect the struggling industry, the successful lease-up of Hobbs Brook’s initial Wakefield building provided the development team with their own ray of sunshine for celebrating 701 Edgewater Drive’s construction milestone.
“There’s no doubt it feels good,” Hobbs Brook President Thomas Dusel said of the progress with the Wakefield undertaking. “I didn’t think we’d get to [the second building] this quickly.”
Few industry observers had anticipated such a strong response, with Hobbs Brook’s decision to move forward with the first building at 601 Edgewater Drive last spring also raising eyebrows. At the time, it had become clear the unprecedented leasing boom of 1999 and 2000 was long gone, leading many developers to pull up their plans and run for cover.
Hobbs Brook instead adopted a long-term, contrarian view, demonstrating faith in the region’s economy and its belief there would be an element of companies still seeking Class A office space even in the economic downturn. But given the wealth of projects on drawing boards up and down Route 128, Dusel said the company felt the project had to be in the ground to attract serious interest.
“We had to build it to get an account,” Dusel said. “It would have been impossible otherwise.” Only a few other developers have been willing to take such a chance on the Bay State office market, with other examples including National Development’s Canton Commerce Center south of Boston and Cummings Properties’ 300,000-square-foot speculative office building in Beverly.
As with the other developers, Dusel said Hobbs Brook felt comfortable that the company had the staying power to make the project work. That view paid off earlier this summer when Epsilon Assoc. signed a lease for 100,000 square feet in the 150,000-square-foot building. The property is now more than 90 percent leased, well above the 60 percent threshold Hobbs Brook had established to launch work on 701 Edgewater Drive.
Besides being a rare option for a large block of Class A space available on a direct basis, Dusel praised the firm’s leasing team, which includes project manager Patricia M. Holland, Vice President Donald G. Oldmixon and R.M. Bradley Senior Vice President Charles E. “Chip” Batchelder. “Chip is relentless,” said Dusel, adding that the company “owes thanks to Chip, Don and Trish for being so close” to achieving full occupancy at 601 Edgewater Drive. “Trish has been unbelievable,” seconded Oldmixon. “She deserves a lot of credit for the [tenant response] we’ve had.”
Bottoming Out
For his part, Batchelder cited Hobbs Brook Management itself as a factor in the leasing volume, not only because of the firm’s ability to get a speculative office building under way, but also due to its reputation as a manager elsewhere, including its flagship Hobbs Brook Office Park in Waltham. “They know they can have confidence in the landlord,” said Batchelder, noting that IBM Corp. just signed on for another lease extension at Hobbs Brook Office Park, at which the business icon has occupied space since 1965. “If you can keep Big Blue happy, you can keep anyone happy,” said Batchelder.
The six-figure Epsilon and IBM deals were buttressed by a 105,000-square-foot lease with Novell Corp. at Hobbs Brook Office Park. “We’ve had a very good year,” Dusel acknowledged, with several other leases also being cemented at its various properties. The volume is especially intriguing given the competitive market, with Waltham currently sporting a vacancy rate well into the mid-20 percent range.
Route 128 North’s office market has seen continued difficulties for much of the year, although Oldmixon said he believes the struggles of the past 18 months may finally be nearing an end. “It feels like things are starting to improve,” he said. “I think we may have finally hit bottom.” Tenants appear to be increasingly out seeking space, he said, while the dour economic conditions that have hammered the region for so long have been on the wane recently, as evidenced by last week’s news that the nation’s economy grew by an astounding 4 percent in the third quarter.
Figures from Spaulding & Slye Colliers also seem to indicate that Route 128 North is beginning to stabilize, no doubt partly aided by the Epsilon lease. Although the vacancy rate has grown from 14.1 percent a year ago to 16 percent, the availability rate has remained relatively constant at 23.9 percent, only slightly above the 23.3 percent mark recorded in the third quarter of 2001. And while the 59,000 square feet of net absorption for the quarter was hardly considered robust, it was a welcomed trend after the first half of the year saw negative absorption of nearly 400,000 square feet in that 10.2 million-square-foot submarket.
In any event, Hobbs Brook has somehow bucked the slow volume in the office market with the Wakefield activity. Even as it completes the lease-up at 601 Edgewater Drive, the leasing team is already aggressively pursuing prospects for the 701 Edgewater Drive property, with an anchor tenant said to be close to inking a deal. While declining to discuss that matter, Dusel said he is upbeat about the building’s chances. “We’re very optimistic,” he said. “It’s a great park and a great location.”
Last week’s topping-off ceremony drew a mix of construction crews, the development team and office workers from the abutting 601 Edgewater Drive. As with that building, 701 Edgewater Drive was designed by Tsoi Kobus Architects of Cambridge and is being built by A.J. Martini of Malden.
