Ram Management Co. recently paid $6.6 million to Nordic Properties for a 175,000-square-foot industrial building at 445 Simarano Drive in Marlborough.
There are a few twists, such as the new exit ramp off Interstate 495, but Brian A. Gagne Sr. has no trouble finding Marlborough.
Prior to departing for Maine more than a dozen years ago, Gagne worked for Charter Development Co., a Peabody firm whose handiwork included the Cedar Hill Business Park in Marlborough. The Metrowest’s potential has apparently stuck with Gagne, as evidenced last week when the acquisitions chief of Portland-based Ram Management Co. completed the firm’s purchase of 445 Simarano Drive in Marlborough.
“I believe strongly in that market,” Gagne told Banker & Tradesman after Ram paid $6.6 million to Nordic Properties for the 175,000-square-foot industrial building. It is the second Marlborough industrial asset acquired by the firm in just over a year, with Ram paying $3.6 million in October 2003 for 120 Bartlett St. The former Butcher’s Wax manufacturing plant is located 1 mile away from the Simarano Drive facility, which sits on a 17-acre parcel.
“Ram has had great success in Marlborough,” agreed Hughes Properties Inc. President Scott R. Hughes, whose firm introduced the buyer to the Simarano Drive opportunity. Ram has just reached full occupancy at the 77,000-square-foot Butcher’s Wax facility, and Hughes praised the company’s strategy to lease up the single-story Simarano Drive building.
According to Gagne, the newest addition to his firm’s portfolio will be subdividable to 16,000 square feet, although Ram would certainly entertain tenancy by a full-building occupant. Between the willingness to break the space up and the Metrowest’s healthy industrial base, Gagne said he is optimistic of the long-range prospects.
“The building has great geometry to it,” he said, citing a square layout that will make it easier to break into smaller increments and clear heights of 21 feet. Hughes noted that the property has a solid power network needed in its former life as a meat-packing plant in the 1960s and 1970s. Ram does plan to infuse some capital into the property, but Gagne said he is impressed by its condition. “It is built like a rock,” he said, adding that a location adjacent to the new I-495 ramp (Exit 23C) should be an extra draw for highway-dependent businesses.
Competitive Setting
The Simarano Drive deal was the second Metrowest asset brokered by Hughes Properties Inc. in the past week, with the firm also handling the sale of 134 Flanders Road in Westborough. The 3-story, 57,000-square-foot office building was purchased by Baltic Westborough LLC for $4.32 million. Hughes joined Hughes Properties Associates Matthew Foley and Brian A. Gagne Jr., the son of Ram’s Brian A. Gagne Sr., in negotiating that transaction on behalf of the sellers, an affiliate of Atlantic Tambone LLC.
The buyer of the Westborough building was represented by Carol Ann Oliver, a senior broker at Parsons Commercial Group Inc. of Framingham. On the Simarano Drive deal, Ram was represented by Hughes, Foley and Gagne Jr.
Through its affiliate, Craneview Investments LLC, Nordic purchased 445 Simarano Drive for $5.1 million in the spring of 2003, and had also planned to lease the space to industrial tenants prior to the off-market sale to Ram Management. Ogden Hunnewell, president of the Burlington-based real estate firm, said Nordic was “able to achieve our objectives” for the asset. “We’re thrilled to have completed the sale and excited about [Ram Management’s] plans for the property as well,” he said.
Hunnewell and Nordic Vice President J. Daniel Bowen negotiated the deal in-house, while Lincoln Property Co., CBRE/Whittier Partners and Trammell Crow Co. also assisted Craneview Investments LLC in the disposition. Ram will self-manage 445 Simarano Drive, but did select Hughes Properties Inc. as exclusive leasing agent.
The Marlborough sale is just one of several industrial deals underway in the area, with Invesco Real Estate Advisors also said to be close on its acquisition of 55 Lyman St. in Northborough from the Gutierrez Cos. Although both sides remain mum on the matter, Invesco is reportedly paying just over $16 million for the 260,000-square-foot property, as reported previously in Banker & Tradesman. After leasing half of the speculative project to McKesson Corp. last summer, Gutierrez immediately set about building the second portion of 55 Lyman St., which is close to being ready for occupancy.
Coupled with the Westborough deal, the Simarano Drive sale has helped kick off 2005 on a strong note for his firm, Hughes concurred. “We’re working on a number of transactions right now,” he said, with a host of industrial tenants seeking space in the range of 25,000 square feet. And while landlords might prefer a few larger requirements, Hughes said he is encouraged by the pace of activity. “We expect to have as good a year or better than 2004,” he said.
Ram Management is equally upbeat about the climate, said Gagne Sr., whose firm also recently acquired a 60,000-square-foot industrial building in Canton. With nearly half the space leased to the Massachusetts State Lottery, the structure at 40 Industrial Way combines a level of existing cash flow with the chance to attract new tenants at market rates. “It gave us enough upside potential to make the investment work,” said Gagne Sr., who said his firm typically prefers value-added opportunities to ground-up development.
Although a certain market segment is chasing net-leased properties, there is plenty of competition for the value-added plays, said Gagne Sr., either by private opportunity funds or space users, who will often pay more than an investor. “Everybody is trying to find that type of product,” said Gagne Sr. Founded in 1983, Ram Management has a substantial portfolio of retail, industrial and multi-family properties under its control throughout northern New England, and is also currently working on a major industrial project in Miami.
