Northrup Grumman Corp.’s leasing of 85,000 square feet at Brickstone Square in Andover was one of two recent prominent transactions in that community and another sign that the suburban office sector throughout Greater Boston has been heating up as 2005 draws to a close.

Unlike the irascible weather, Greater Boston’s suburban office sector has cast a sunny hue of late, enhanced by the 400,000-square-foot commitment from Instrumentation Laboratory at 180 Hartwell Road in Bedford and several other notable leases being struck as the market leans into the final stretch of 2005.

“Overall, it was a solid third quarter, especially in the north and northwest [regions],” said Meredith & Grew Oncor Senior Vice President David J. Pergola. “The stars aligned and some big deals that have been out there awhile finally got done.”

Two prominent transactions were completed in Andover, the Draeger Medical Systems agreement for 128,000 square feet at 6 Tech Drive and Northrup Grumman Corp.’s leasing of 85,000 square feet at Brickstone Square. Other hefty requirements are now percolating, with iRobot reportedly needing 150,000 square feet and a BAE Systems search for 100,000 square feet under way in the Route 3 and Interstate 93/Interstate 495 areas.

The latter corridor enjoyed a balmy summer on the office front, warmed by nearly 80,000 square feet of leasing at the North Wilmington Commercial Park and a 68,000-square-foot lease to Selectron at 400 Research Drive in the Wilmington Technology Park. According to Meredith & Grew, the I-495 North submarket posted 295,000 square feet of net absorption in the third quarter, bringing the 2005 total to 520,000 square feet on the plus side. Only Route 128 Northwest fared better in the third quarter, registering positive absorption of 450,000 square feet in the Meredith & Grew survey.

“Those are numbers we haven’t seen since 1998 or 1999,” Pergola said, referring to communities from Lexington to Woburn. Although the Instrumentation Laboratory deal was a key contributor, it has hardly been a solo act. FT Interactive Data took 95,000 square feet at 32 Crosby Drive in Bedford, for example, leading tenant Sungard Data Systems into a 47,000 square-foot lease at 3 Van de Graaff Drive in Burlington. Cushman & Wakefield principal James Thomson confirmed the seven-year Sungard lease, with Thomson and a Philadelphia colleague representing the tenant and CBRE/Lynch Murphy Walsh Advisors principal Stephen Murphy brokering the lease for the landlord. The SolidWorks expansion into 110,000 square feet at 300 Baker Ave. in Concord also was recorded in the third quarter, softening the blow of longtime tenant Avaya Inc. departing for Chelmsford.

‘A Logical Choice’
Elsewhere, Raytheon Inc. has agreed to take 40,000 square feet at 600 Technology Park Drive in Billerica from the sublessor, Nortel Networks, settling an extensive space search conducted for the defense giant by its advisors, McCall & Almy. Pergola and Meredith & Grew Assistant Vice President Matthew S. Adams represented the landlord, and also acted for the owners of 400 Research Drive in the Selectron lease, with the tenant represented by Jason Levendusky of CBRE/Whittier Partners. The property is owned by Cross Harbor Capital.

Although Pergola declined to discuss the matter, some observers have suggested that an additional Raytheon requirement for a Waltham-based division needing approximately 100,000 square feet could also be accommodated in the Nortel space. “That would be a logical choice,” one broker said, especially as Raytheon expands its traditional horizons from Lexington up into Woburn and beyond. Befitting other Nortel facilities, 600 Technology Park Drive “is incredible,” said the source, featuring high-end finishes and various on-site amenities. McCall & Almy officials were unavailable to discuss whether that option is being considered. Neil Schneider and Lenny Owens handled the Nortel Networks lease on behalf of Raytheon.

Thomson described the third-quarter leasing velocity as “decent,” and said he is encouraged by the willingness among firms to consider the northern submarkets in the improving economy. Slammed by the high-tech crash that took hold in 2001, communities from Andover down to Woburn and throughout the Route 3 and Route 128 North submarkets saw availability rates skyrocket into the 30 percent range and suffered several consecutive years of negative absorption. Trammell Crow has tracked a substantial dip in the vacancy rate there this year, from 24.1 percent to 21.7 percent, principal John Boyle said last week.

“It certainly is getting better,” said Boyle, whose firm completed a 29,000-square-foot lease for the Bank of America in Burlington, and also negotiated the Draeger pact. For the most part, the suburban activity has been generated from small to mid-sized users, said Boyle, although the 250,000-square-foot lease at 500 Old Connecticut Path in Framingham by the TJX Cos. helped lift the results as well, so much so that Trammell Crow dropped the vacancy rate in the Natick/Framingham submarket from 12 percent to begin the year to 6.9 percent nine months later.

Garry Holmes of Natick-based R.W. Holmes concurred that his home base has performed well, aided by a diverse tenant mix that includes life sciences, financial services and technology companies. Holmes most recently assisted B.J.’s Wholesale Club in several leases at the Natick Business Park where the firm now occupies more than 170,000 square feet in four buildings, including its corporate headquarters at One Mercer Road.

Up the road, the central strip of Route 128 continues to see the greatest resurgence, so much so that rents are exceeding the elusive $30-per-square-foot mark not attained this side of the new millennium after the late 1990s yielded select deals into the $70-per-square-foot range. While more subdued, the current rate offers hope going forward, said Holmes, citing a $34-per-square-foot deal recently recorded at the Wellesley Office Park. Waltham also has had rates at the Bay Colony Corporate Center and Waltham Woods top the $30-per-square-foot figure, and some investors have forecast an ultimate return above $40-per-square-foot in that submarket.

Despite the gains, Holmes said it has not been uniformly robust, citing lingering difficulties in the I-495 central market. “It has not [performed] at the pace I had expected it would,” he said, with Marlborough dragging along even after Berwind Property Group struck a 200,000-square-foot lease renewal with 3Com Corp. at its Campus at Marlborough office complex. Spaulding & Slye Colliers estimated third-quarter net absorption in the central Route 128 submarket at just 17,000 square feet for the quarter and 300,000 square feet for the year.