Vistaprint is growing, and needs about 135,000 square feet in the MetroWest region. The firm has narrowed its choices to two: a build-to-suit project near its current Lexington home, or existing space in Waltham. Its choice will indicate where the company sees itself in five or 10 years – and industry sources say that may not be the home of the Minuteman.
Vistaprint, known for its inexpensive business cards and other marketing materials, currently leases about 200,000 square feet of space at a building known as Ledgemont 2, located at 95 Hayden Ave. in Lexington.
But the company is growing, and considering long-term real estate options. Sources familiar with the company’s plans say Vistaprint is looking hard at a building on a Waltham campus owned by Boston Properties (BPX) called City Point. The building under consideration is 230 City Point, a roughly 300,000-square-foot office building constructed in 1992 that BPX acquired in 2005.
Say the company builds a building that’s about 135,000 square feet near its current Lexington location, to be called Ledgemont 3. The town approved commercial rezoning for the new building in 2009. And the town fathers recently okayed the plan to allow Vistaprint to pay a reduced tax bill on its proposed expansion. The 13-year plan would start the rate at 45 percent, eventually dropping to 2 percent, according to local media reports.
Yet there is far more room for growth available at City Point, compared with the Ledgemont area, which is largely built out, industry sources told Banker & Tradesman. And amenities like restaurants and retail offerings are far more numerous in Watch City. Plus, Boston Properties has plans to build a restaurant building that industry experts expect will somewhat mirror Boston’s Liberty Wharf, a popular new development on the South Boston Waterfront that features new eateries from Legal Sea Foods, Del Frisco’s and others. The campus is also highly visible from Interstate 95, and there are two hotels within spitting distance. In comparison, the Lexington option offers a truly suburban office building in a more secluded, heavily wooded location.
Boston Properties, Equity Office Properties and other “major landlords” in that market are currently sitting on development sites.
Wait And See Approach
“I think they’re waiting to see what gets absorbed in the next couple of years before getting build-to-suit or [amenity-adding] projects under way,” said Jeremy Freid, principal with Boston Realty Advisors brokerage. “Clearly, most people look at Waltham before Lexington.”
But amenities certainly are not the deciding factor. The company runs its U.S. operations from the Lexington property. If Vistaprint did decide on Waltham, it would likely break off a group of the company that could stand alone and allow that group to grow at City Point, said one industry expert who asked for anonymity due to a conflict of interest. And if that happened, the remainder of the company will likely follow. But that wouldn’t likely happen for several years – 2016 or 2017 – after the company’s Ledgemont 2 lease expires.
That would be bad news for Lexington’s office vacancy rate, which is currently higher than 20 percent, according to information from Cassidy Turley FHO’s research team. Waltham’s office space is about 16.5 percent vacant. Lexington Class A tenants pay $23.36 a square foot on average, and Waltham office tenants fork over an average $29.48 a square foot for Class A space.
“Whatever happens will clearly have a material impact on the absorption rate of either one of those markets,” BRA’s Freid said.
For now, Vistaprint is playing its cards close to the chest and did not return phone calls as of press time. Boston Properties also could not be reached. Vistaprint is expected to make a final decision before the year ends.
Email: jcronin@thewarrengroup.com
