Essex River Ventures of Andover is buying the Lexington Corporate Center, reportedly agreeing to pay more than $40 million for the former optics factory at which parts for NASA’s Hubbell space telescope were produced.
Displaying repeated faith in suburban office properties, an Andover investor has agreed to purchase the Lexington Corporate Center in Lexington, sources have told Banker & Tradesman. Essex River Ventures is expected to pay approximately $40 million for the asset, which would be its third regional acquisition of the past year. “They do have it under agreement,” confirmed one industry source. Essex River Ventures was formed in 2002 by John W. Fenton, who left Berkeley Investments to launch his own investment vessel.
Lexington Corporate Center is owned by Nordic Properties and the Berwind Co., which bought the complex for $7.2 million in 1997. The four-building complex contains 285,000 square feet of space. The former optics factory, which produced parts for the NASA Hubbell space telescope, was then repositioned as a multi-tenanted office complex and is now leased to such firms as Excelergy Corp., Keane Inc. and Dynamics Research Corp.
“It’s a very good property,” said Trammell Crow Co. principal James F. McCaffrey, whose firm is orchestrating the sale. McCaffrey declined to discuss the matter, but did say the development received a wide swath of attention when put out to bid. “We’ve had a lot of interest,” said McCaffrey, who cited a central location, efficient floorplates and the extensive investment by Nordic/Berwind as the leading draws for the development.
Calls to Nordic President Ogden Hunnewell and to Fenton were not returned by press deadline. The joint venture owners put Lexington Corporate Center on the market in late 2003, with an asking price of $44 million. One source claimed that the Essex River Ventures bid is below that mark. According to industry estimates, the property is achieving rents in the low $20 per-square-foot range.
Essex River Ventures has shown little concern for the office market’s lingering problems, having already made two purchases in recent months, including the Great Woods Office Park in Mansfield. Essex paid $5.4 million for that property in partnership with the Praedium Group of New York. The pair also acquired a three-building office complex in Salem, N.H., last year. Praedium is said to be involved in the Lexington deal as well.
Life After Raytheon
“It’s a property that has done well and will do well again in a strong market,” Cushman & Wakefield Executive Director Mark Winters said of the Lexington property.
Once home to Raytheon Co., Lexington has emerged as one of the more resilient suburban communities during the past decade. While the defense giant departed last year to a new headquarters in Waltham, Lexington landlords have lured several new firms to help soften that defection. Among the notable deals was a 52,000-square-foot life sciences firm that recently landed at Lexington Technology Park, Raytheon’s former fortress which is undergoing its own conversion into an office park by Patriot Partners.
Richards Barry Joyce & Partners principals Jonathan Varholak and Robert Richards brokered the lease on behalf of the tenant, NitroMed, while CRBE/Lynch Murphy Walsh Advisors partner Steve Murphy represented Patriot Partners. The lease was one of the major bright spots in the first quarter of 2004, with Spaulding & Slye reporting last week that the Route 128/Massachusetts Turnpike submarket in which Lexington is located posted positive absorption of 26,000 square feet for the first three months of the year.
While somewhat anemic, the entire Greater Boston suburban market had one of its strongest showings in some time, with an estimated 850,000 square feet of net absorption in the first quarter. The bulk of the positive absorption – 435,000-square-feet – occurred in the Interstate 495/North submarket.
