Boston’s newest office tower, 33 Arch St., is still little more than a hole in the ground, but anyone wondering what it will look like upon completion in 2004 can satisfy their curiosity with a quick visit to neighboring 101 Arch St.
There, on the 17th floor, the project team has set up a marketing center to help brokers and potential tenants conceptualize the 33-story structure even before it breaks onto the skyline. The center is outfitted with materials that will be used in the new building, as well as large photos of the panoramic views to be commanded from the upper floors. The developers, led by Congress Group Ventures and Lend Lease Real Estate Investments, also have a virtual reality tour of the tower, a short film which is available on CD-ROM.
Marketing centers and the gadgetry accompanying them are the norm these days when leasing office space, as real estate professionals combine the latest technology with old-fashioned salesmanship to convince tenants of a building’s potential. It’s an effective way to make your presentation, Trammell Crow Co. principal Robert M. DeLaney said of the marketing center.
Visitors are not only able to watch over the construction site as the tower rises, he noted, the displays of materials and marketing presentation help bring the project to life. Trammell Crow is the leasing broker for 33 Arch St., an assignment being overseen by DeLaney and colleagues Barry Hynes and Nora Brady.
Codman Co./TCN principal Ted Wheatley agreed that landlords often feel compelled to provide an all-out marketing blitz, especially in a challenging environment such as that facing the industry at present. It is not a new approach, with Wheatley recalling one project model early in his career that cost $150,000 alone, but he acknowledged that the tools available are increasingly elaborate.
We are a visual society, and a marketing center will communicate the sizzle [of a project] a lot more effectively than reading the leasing brochure, he said. It’s a component that seems to be a requirement in marketing first-class properties today.
In some cases, as with the new World Trade Center office buildings in Boston’s Seaport District, Wheatley said the center helps people understand the area and what it has to offer. That is important, he said, given that it is considered a pioneering location. It also helps the developer allay other misconceptions or point out benefits the tenant might not be aware of, Wheatley said. Interestingly, he said most landlords did not back off their promotions even when the market was booming in 2000, a time when tenants had little bargaining power.
Even when the market is roaring along, landlords still want to have the best tenants, he said, adding that it can also help to justify high rental rates.
Most major buildings today also feature web sites dedicated to the specific project. Thirty-three Arch St. has a site, as does 131 Dartmouth St., a 365,000-square-foot office building underway in the Hub’s Back Bay district. Along with renderings and project updates, browsers can find floor layouts, details on the building’s telecommunications network and mechanical systems, and even information about the surrounding area and amenities offered.
The main goal is to provide a greater understanding of the building and its attributes, said Congress Group principal Enrique Bellido. In a recent presentation at 33 Arch St., for example, he cited the tower’s flexible layout as a draw, with floorplates of 19,000 to 25,000 square feet designed such that tenants can take one of three approaches. Along with the traditional law-firm style, with offices along the perimeter, 33 Arch St. also can lay out primarily with workstations, or via a hybrid of workstations in the middle and offices at either end.
Quoting rents of $55 to $85 per square foot, 33 Arch St. might be priced at the top of the market, but DeLaney said the building’s design will allow companies to fit more people into their space. At the end of the day, what is really important is the amount of money spent per head, said DeLaney. And the rate-per-head [at 33 Arch St.] is going to be very competitive with the rest of the high-rise towers in town.
The landlords have been encouraged by the prospects coming through the marketing center, said Bellido, adding that they include several solid firms whose lease terms run out in the 2004 or 2005 time frame. Particularly given the lack of new construction in the pipeline and a sense that the current market slowdown is only temporary, Congress Group, Lend Lease and their partners are taking a patient approach to filling the tower. Although an anchor tenant would likely garner a discount as a pre-leasing incentive, Bellido said the developers feel no pressure to do a below-market deal in the depressed environment.
We need to keep things in perspective and realize the building is not being delivered today, said Bellido. We have almost all the time in the world right now.
State Street Bank is taking a similar approach at One Lincoln St., the 36-story tower under construction across from Boston’s South Station. Although State Street leased all one million square feet in the building, it now has a 250,000-square-foot portion being offered for sublease. But while the company is hopeful of doing a deal, broker John Barry of Richards Barry Joyce & Partners stressed last week that the firm does not feel rushed given the tower will not open until late in 2003.
It really [will be] a different market in terms of lease comparables from what we are seeing today, Barry said. Because of that, he said, we will be holding the rate at One Lincoln St.
State Street is more willing to strike a deal with another property RBJ&P is handling, that being 235,000 square feet at 1200 Crown Colony Drive in Quincy. They are motivated to put a sublease in there, said Barry, given that the institution is currently paying rent on that space. Barry’s colleague, Michael Frisoli, is overseeing the Quincy assignment.
Barry has set up a marketing suite at RBJ&P’s headquarters at 125 Summer St., a property that conveniently overlooks the One Lincoln St. project. As the structure rises, it becomes less critical to have a marketing center, Barry said, because a property tour can give tenants a better feel for the building. A center can assist tenants in other ways, however, with RBJ&P retaining an architect to help potential tenants see how their operation would fit into the One Lincoln St. building.
Although computer-aided design, videos and other promotional material can help sell a property, the difference often comes down to experience and professional know-how, Barry added. In the case of State Street, RBJ&P’s team approach has been helpful in identifying what tenants would be interested in Quincy versus One Lincoln St., Barry said, and then in approaching those players.
The key for us is market penetration, he said. We know the tenants in the market, and we like to think we have great access to the decision makers. That’s really the greater resource we bring to State Street … because we can go all out in an effort to lease the space.
