Equity Office Properties sought a buyer for the Crosby Corporate Center in Bedford earlier this year but now has abandoned its quiet marketing effort. Pictured above is one of the business park’s nine buildings, 36 Crosby Drive.

Bolstered by strong leasing in the first quarter, investment sales of suburban office buildings are off to a brisk pace in 2004, although a stealthy effort by Equity Office Properties to peddle the Crosby Corporate Center in Bedford has been abandoned. EOP officials would not even say whether Crosby was ever on the block, but sources insist the real estate investment trust was indeed trying to market the nine-building complex.

“They did stick their toe in the water,” claimed one industry professional who has been tracking the process. EOP has now “pulled back” on that strategy, the source maintained. “We assume they weren’t happy with the offers,” said another source relaying a similar report, adding that Trammell Crow Co. has been retained to lease Crosby Corporate Center. Trammell Crow principal Brian Hines declined to discuss any potential sale, but acknowledged his firm has been tabbed to lease approximately 150,000 square feet in two Crosby buildings. EOP officials did not respond to inquiries by press deadline.

Elsewhere, an office availability rate of 27 percent has not prevented other sales from proceeding throughout suburban Boston, with the latest instance being East-West Enterprises closing on the Tower at Northwoods in Danvers. In that deal, brokered by Cushman & Wakefield of Massachusetts, East-West paid $23.3 million for the prominent green-glass tower at 222 Rosewood Drive.

Cushman & Wakefield’s investment sales group previously had fetched record pricing for an office building in Stoughton, while other recent examples of suburban office buildings changing hands include New Boston Fund securing a 140,000-square-foot structure in Billerica and Boston Scientific acquiring a 106-acre campus in Marlborough for $43 million.

The latter deal was motivated by the user, but investors continue to pursue suburban office opportunities as well, said Jeffrey B. Swartz of Spaulding & Slye Colliers. A key factor in attracting capital is having solid building fundamentals, said Swartz, whose firm arranged a full-building lease at the Billerica property that made the sale from Archon Atlantic to NBF feasible.

“The best properties are getting big numbers,” said Swartz. “Anything with good-credit, long-term tenancy is flying off the shelves, but if you’ve got a lot of empty space, it’s a problem.”

Investment-grade assets have been limited due to the economic downturn, but Swartz said he anticipates a decent year for suburban sales. “It’s clearly not the volume of the go-go days, but we’re seeing some decent activity,” he said, with investors likely to be further enthused by the improved leasing velocity recorded in the first quarter.

Unlike downtown Boston, which had a challenging start to 2004, most suburban markets in eastern Massachusetts have enjoyed substantial leasing during the past few months. Trammell Crow’s research department says that the suburbs had more than 1.06 million square feet of net absorption in the first quarter, while Spaulding & Slye estimated a positive showing of 857,000 square feet.

“It feels like it [the office rental market] has bottomed out and we have turned the corner,” said Swartz. “The last leg is job recovery, and it looks like that is finally happening.”

Center of Attention

In the Tower at Northwoods sale, a stable of solid tenants such as Metropolitan Life Insurance, Smith Barney and Liberty Mutual helped seller Phoenix Life Insurance Co. attain more than the original asking price for the fully leased building, according to Cushman & Wakefield Associate Director Jeff Gates. The 11-story, 185,000-square-foot asset “is an exemplary property that attracted a great deal of interest from the investment community,” Gates offered in confirming the sale to East-West.

“This building is a prime example of the type of assets that are in high demand by investors due to its strong, stable cash flow,” said Gates, who brokered the sale with Cushman & Wakefield financial services group colleagues Robert E. Griffin Jr., Richard F. Herlihy, Christopher T. Griffin and leasing broker Torin Taylor. The Tower, which offers unequaled views of the North Shore, was originally built in 1990 by Rosewood Development Corp.

As for Crosby Corporate Center, sources said EOP may have been simply pursuing a path taken by other owners to see what sort of investor fervor they might muster and retrenching if the desired price is not attained. It is unclear what EOP was looking to get for Crosby, but even at a conservative $100 per square foot, the price tag would be nearly $60 million.

While the Tower at Northwoods may have exceeded expectations, properties with a level of risk often require a discount in order to trade, according to industry observers. The Lexington Corporate Center in Lexington is said to be under agreement to Essex River Ventures in the $35 million range, for example, substantially below the $44 million asking price.

Trammell Crow is brokering the Lexington sale, and reportedly had also been handling sales negotiations for Crosby Corporate Center. Prior to giving the leasing to Trammell, EOP had performed those duties in-house. According to CoStar, the 595,000-square-foot Crosby Corporate Center has 165,000 square feet of space available on a direct basis and 240,000 square feet when space leased to RSA Security Inc. that also is available is included.

The latter portion may soon be disappearing, however, with sources also claiming that Waltham-based Empirix is subleasing nearly 75,000 square feet at 20 Crosby Drive from RSA. Calls to RSA’s broker, Roy Hirshland of T3 Realty Advisors, and to Empirix’s representatives at Meredith & Grew, were not returned. “That’s where they seem to be headed,” one source insisted of Empirix, a software company that has been on an extended headquarters search. The source predicted further activity on the Crosby Corporate Center space being marketed by Trammell Crow. “That’s some of the better product [office space] of that type on Route 3,” said the broker. More than 100,000 square feet of the space being marketed by Trammell Crow is left over from Intel Corp., explained Hines, who said he is encouraged by the first quarter results in the suburbs. “We’re headed in the right direction,” he said.