The former 3Com office park in Marlborough, which Berwind Property Group recently acquired and has renamed as The Campus at Marlborough, is one property that has no problem attracting tenants.

Offering a glimmer of hope for the struggling Interstate 495 office market, a number of significant leases have finally been consummated after extensive negotiations, although it appears that the fringe loop of Boston’s suburban office market still faces a long road to recovery.

In one of the larger suburban deals to date in 2002, Siemens Information Systems has subleased more than 65,000 square feet at 271 Mill Road in Chelmsford from Tellabs, erasing a large gap in that 130,000-square-foot property. Siemens is relocating from Westford into the new property, which opened in July 2001. Meanwhile, a life sciences company is also reportedly angling to take space in a companion building next door, 269 Mill Road. That space also is controlled by Tellabs.

Siemens was represented in its lease by James Thomson and Rich Ruggiero of Cushman & Wakefield, while Brian McKenzie and John Wilson of Richards Barry Joyce & Partners acted on behalf of Tellabs.

Those two brokerage teams also negotiated a 39,000-square-foot renewal by the 3M Corp. at 300 Griffin Brook Park in Methuen, with C&W’s Thomson and Ruggiero serving as agents for the tenant and RBJ&P representing Boston Capital Institutional Advisors, owners of the 106,000-square-foot building.

Overhang Remains

While the leases are encouraging, and industry observers insist conditions are looking better overall along I-495 than they were a year ago, the region continues to suffer from an overhang of sublease space and the demise of the high-tech industry that fueled much of the area’s growth into mid-2000. In its just-released first-quarter 2003 forecast, RBJ&P places the current vacancy rate for the Route 495 North market at 25 percent, up more than 2 percentage points since the end of the third quarter.

In its first quarter forecast, RBJ&P also notes that several new blocks of space were added recently to the I-495 West market, which stretches from Bolton southward to Milford. New opportunities for tenants include 250,000 square feet offered up by EMC Corp. at 9 Technology Drive in Westborough, another 160,000 square feet of excess EMC space at 35 Parkwood Drive in Hopkinton and 102,000 square feet at Two Technology Drive in Westborough. RBJ&P also noted that Capital Group Properties has surged ahead with a speculative office building at 132 Turnpike Road in Southborough, a rare undertaking in the depressed environment. That building is expected to be delivered later this summer.

Corporate downsizing remains a concern along I-495, according to RBJ&P, with firms such as Hewlett Packard, Nortel Networks and EMC still trying to determine how much space they will require going forward. In addition, the merger between Hewlett-Packard and Compaq could have serious ramifications for I-495, RBJ&P said, given Compaq’s major presence in the MetroWest after purchasing Digital Equipment Corp. in the mid-1990s.

Encompassing 16.5 million square feet, I-495 West did see a slight vacancy decrease of 1 percent between the end of the third quarter and year end 2002, putting the current vacancy rate at 20.2 percent. Of that, direct vacancy accounts for 13.1 percent and sublet space totals 7.1 percent. I-495 West had a difficult year on the absorption front, with 1.4 million square feet of negative absorption for 2002.

One property that has generated solid traffic is the former 3Com office park in Marlborough, which Berwind Property Group recently acquired and has renamed as The Campus at Marlborough. The existing building on the sprawling parcel has already landed one big tenant in Life Sciences Inc., which took 55,000 square feet, and broker Kevin Malloy of Lincoln Property Corp. said last week that the Class A asset continues to draw tenant interest.

“Quality always sells,” said Malloy, who declined to discuss whether TJX Corp. had taken a serious look at the property as part of its search for at least 300,000 square feet of space. The TJX requirement is one of several large deals circulating in the I-495 West market at present, with some sources claiming the Framingham-based retailer may now be seeking upwards of 500,000 square feet.

Unaffected by the high-tech mania of the late 1990s and early into 2000, I-495 South has remained relatively stable, according to RBJ&P. While overshadowed by industrial and flex space, the 1.9 million square foot I-495 South office market has been a consistent performer, with the vacancy rate now at 10.5 percent and rental rates running between $15 to $22 per square foot for Class A space.

As for I-495 North, RBJ&P reports there are still 26 space opportunities of 50,000 square feet or more in the submarket, which totals 15.1 million square feet. Vacancy rates have increased markedly in recent months, from 15 percent at year-end 2001 to the current 25 percent. Direct vacancy accounts for 12.3 percent and sublet space for 12.8 percent, RBJ&P estimates.

Despite the recent struggles, I-495 West and I-495 North nonetheless are poised for a rebound in the coming months, the RBJ&P report maintains. According to the Boston-based real estate services company, there are 29 firms seeking office space in I-495 alone right now, requirements that represent more than 760,000 square feet of space. And while acknowledging that negotiations take longer to complete, RBJ&P said tenant activity has picked up steadily in recent months.

Joe Clements may be reached at jclements@thewarrengroup.com.