‘Great site’

After recently being tabbed by Equity Office Properties to market an East Cambridge building as lab space, Richards Barry Joyce & Partners reportedly has won another prime Cambridge assignment with its selection as agent for Acorn Park in the city’s Alewife district.

“I think that’s the case,” said one Boston broker whose firm did not compete for the property, which offers an opportunity to handle the leasing of as much as 900,000 square feet of campus-oriented space. RBJ&P President Robert B. Richards referred inquiries to the landlord, the Bulfinch Cos. of Needham. Efforts to contact officials there were unsuccessful by Banker & Tradesman’s press deadline, but sources insisted that RBJ&P has been awarded the prime listing.

Acorn Park is the longtime home of the Arthur D. Little Co., a venerable consulting firm that has undergone major upheaval over the past two years resulting in a bankruptcy reorganization and subsequent split into three separate groups. According to sources, at least one of the three ADL entities is expected to remain at the Alewife campus, and observers added it is still possible that the owners could compete for additional divisions as well.

“They have a very good shot” at landing other ADL requirements, said one Cambridge broker. And while Richards would not discuss RBJ&P’s status in representing Acorn Park, he predicted that the 27-acre complex would be attractive for a range of users, including life sciences companies being squeezed out of East Cambridge. The prime rents and lack of lab space in the Kendall Square area has forced many tenants to look outward, Richards said, with Watertown, Waltham and Framingham increasingly being targeted for expansion.

“I think it’s a great site,” Richards said of Acorn Park, predicting that Bulfinch “will attract a lot of companies over there.”

Spaulding & Slye Colliers principal Debra J. Gould, an expert on the Cambridge office and lab market, agreed that many life sciences companies are exploring suburban destinations. For a variety of reasons, she said, Alewife offers prospective tenants the best of both worlds, with cheaper, more plentiful opportunities in a location sporting a Cambridge address and quick public transit access to East Cambridge via the Red Line subway.

“It’s becoming a popular location of choice,” acknowledged Gould. “Companies who feel they have to be near MIT [Massachusetts Institute of Technology] and Harvard but don’t necessarily want to pay $55 a square foot … are finding it a viable alternative.”

Spaulding & Slye was one of the original developers in the Alewife section, a longtime industrial area that Gould said has emerged in the past few years as a Class A office destination after initially struggling when it was first established in the late 1980s and early 1990s. Besides a solid transit system, including the massive Alewife parking garage, Gould noted there have been recent roadway improvements over the past decade, as well as the addition of a luxury residential project and various retail amenities, including several restaurants.

“A lot of people really love it,” said Gould, particularly workers living to the west of the city in such communities as Concord, Lexington and Acton. While certain high-tech firms catering to younger employees may still be focused on East Cambridge, Gould said Alewife should cater to most company demographic needs. To date, Alewife has not been particularly overwhelmed by life sciences firms, although Wyeth Pharmaceuticals has had a long-standing tenancy there.

Acquired by Bulfinch from O’Neill Properties in 2000, Acorn Park currently has about a half-dozen older buildings on site that the new owners eventually would like to replace with new construction. The proposed new footprint is estimated at 900,000 square feet. J.P. Morgan Investments also has space coming available at 125 and 150 CambridgePark Drive, with Gould estimating that there will be upwards of 120,000 square feet up for grabs there during the next 12 to 18 months. Growth-oriented firms can also look to several development sites along Route 2 that could yield additional office and life science space, although speculative construction is unlikely in the current environment.

Indeed, as far as market fundamentals are concerned, Alewife appears to be headed in the wrong direction at present, experiencing a substantial jump in vacancy and continued deterioration of rental rates. According to Cushman & Wakefield, the 2.09 million-square-foot market has seen overall vacancy rise from 14.4 percent a year ago to 26.3 percent at the end of the third quarter. From mid-year 2002 to the third quarter alone, Alewife had 173,000 square feet of negative absorption, while the average asking rental rate slipped from $32.50 per square foot to $30.28 per square foot.

In contrast, Cushman & Wakefield places the vacancy rate in East Cambridge at 21.1 percent at the end of the third quarter, up from 14.5 percent nine months into 2001, while the average rental rate is $43.90 per square foot. East Cambridge has 11.1 million square feet, while the Massachusetts Avenue/Harvard Square corridor totals 2.2 million square feet. That middle market has an 11.3 percent vacancy at present.

If RBJ&P has won the Acorn Park listing, as anticipated, it would be the second major competition won by the firm in less than a month. The real estate services company was also selected to represent Equity Office Properties at its 245 First St. property in East Cambridge, to which EOP is also trying to lure biotech tenants. About 140,000 square feet of space is available in the First Street development.

Richards Barry Joyce & Partners Cracks Tough East Cambridge Nut

by Banker & Tradesman time to read: 4 min