Suburban office parks are pulling out all the stops to attract tenants turned off by a homogenous corporate landscape.
Newton-based National Development and Charles River Realty Investors will seek approval to build a hotel, several restaurants and stores at New England Executive Park in Burlington. The two developers acquired the 1-million-square-foot office park next to the Burlington Mall last June for $216 million.
“They’re looking at amenities,” Burlington Town Manager John Petrin said. “The retail will be tied to the live-work-play concept.”
Mindful of office tenants’ growing preference for urban locations, developers are redesigning office parks with downtown-style layouts that include a mix of retail, offices and housing.
Burlington is already the laboratory for the region’s largest experiment in next-generation office parks: a 300,000-square-foot outdoor retail complex called 3rd Ave.
Developer Nordblom Co. tore down 11 aging office buildings in Northwest Park to make way for coming attractions such as a Wegmans supermarket, Kings entertainment complex and Tony C’s Sports Grill.
Nordblom Co. developed the 153-acre park in the 1950s to serve the just-emerging tech industry along Route 128. It added 150 acres in 2007 with the $212 million purchase of the adjacent former Sun Microsystems property.
Nordblom executives sensed that the post-war industrial park model, with its low-slung office and lab buildings, was becoming obsolete.
“‘Living and working in the suburbs is a soul-sucking experience,’ is what we said to ourselves, and we wanted to create something that is more interesting,” said Todd Fremont-Smith, a Nordblom executive vice president.
Nordblom submitted a plan for 600,000 square feet of retail, 300 housing units and a 225-room hotel on the original 150-acre property. Since gaining town approval, it has demolished 11 of the decades-old office buildings on 30 acres near the heart of the office park to make way for the Main Street-style retail boulevard now under construction.
A 135,000 square-foot Wegmans grocery store that opens in September is the anchor tenant for the initial 300,000-square-foot phase of retail development. Eight restaurants and 20 specialty retailers are opening this year, beginning with bowling-themed entertainment complex Kings on April 28. Another three restaurant spaces and 30,000 square feet of retail space are available. Construction recently began on a 200-unit apartment complex that will open in 2016.
Adding retail and entertainment options is already benefiting the office park as existing tenants sign on for the long term. Software developers Foliage and medical device manufacturer Thoratec Corp. recently signed 10-year lease renewals.
“Everyone wants to work on Charles Street or the Back Bay, but not everyone can afford it,” Fremont-Smith said. “We’re hearing people say they want to be near 3rd Ave., and that’s the first time we’ve ever heard that.”
Nordblom also is marketing two build-to-suit sites totaling 670,000 square feet for major office users within the park.
The Apex Of Route 128
A town of 25,000 residents, Burlington swells to 150,000 every weekday as workers fill more than 6 million square feet of space in nearly 100 office and lab buildings and 3 million square feet of retail space in local malls and shopping centers.
Burlington is now widely considered the hottest Route 128 office market. Average office rents increased 18 percent to $28.96 per square foot in the 12 months ending March 31, according to Cassidy Turley research. That compares with $28.61 in Waltham, traditionally the strongest suburban market.
“To its credit, Burlington did a good job with master planning,” said Jack Kerrigan, a principal with brokerage Avison Young. “There are so many amenities, so many restaurants and you’re seconds from 128, 93 and Route 3.”
In the past decade, Burlington has gotten its share of help from state projects designed to reduce rush hour bottlenecks and encourage development. The state spent $385 million adding two lanes to Route 3 north, a project that was completed in 2005. The town of Burlington received $3.5 million in MassWorks infrastructure grants to pay for new traffic signals and redesigned intersections next to 3rd Ave.
“It’s a combination of the town, the state and the developer that has been able to improve development in various areas of town,” said Petrin, the town administrator.
The office market has even rebounded to support speculative development, not seen in the suburbs since before the economic meltdown.
The Gutierrez Company of Burlington will break ground next month on a 100,000-square-foot office building at 4 Burlington Woods Drive.
“We feel very bullish on the market and there’s limited availability, especially when you look at the first-class space,” said Doug Fainelli, vice president of operations for Gutierrez.
National Development declined to comment last week on specific plans for New England Executive Park. Company executives recently met informally with town officials to brief them on the changes.
“We’ve seen some hints of what they’re looking to do and they’re looking to go before town committees very shortly to finalize those plans,” Petrin said.
