Strewn with weeds and trash and served by a pockmarked roadway, the stretch of commercial properties along Pleasant Street in Watertown and River Street in Waltham is difficult to envision as a prime development opportunity, but the pace of activity there of late is proving that beauty truly is in the eye of the beholder.
“It’s not too pretty right now, but it will be,” Spaulding & Slye Colliers broker David A. Martel proclaimed last week. “It’s going to look totally different a year and a half from now.”
The main salvation for the aging industrial buildings found along the two-mile strip is the explosion of telecommunications data centers springing up to support the Internet and e-commerce. Martel, for example, estimates that there are 30 such companies in Greater Boston needing a minimum of three million square feet of space, demand that has real estate investors scrambling to find appropriate locations.
Spaulding & Slye is the leasing agent for Infomart, a data center which will be located in a former cold storage warehouse at 555 Pleasant St. in Watertown. With 400,000 square feet, it offers a massive amount of space, but the project is dwarfed by a similar venture located a few doors down along Seyon Street in Waltham. Featuring 1.2 million square feet, the former Raytheon manufacturing plant has 800,000 square feet available for telecom use. While a hefty amount of space, developer Ted Saracen said last week that it is quickly being absorbed.
“Our activity has been beyond our wildest expectations,” Saracen said. “We’re hitting the market just right.”
Saracen, whose firm is partnering with Highgate Holdings of Texas, expects six new fiber optic carriers to come to the site within the next six weeks, adding that he believes all of the space will be spoken for within 90 days. The firm’s biggest coup was luring Global Crossing to the park, with that national firm committing last week to an additional 100,000 square feet. That will bring its total occupancy at ipark, the name given to the telecommunications complex, to 450,000 square feet.
Stephen J. Murphy, ipark’s exclusive leasing agent, cited the combination of Saracen and Highgate Holdings as a key factor in attracting California-based Global Crossing, whom he called the leader in telecommunications data centers. Highgate has the industry expertise, Murphy said, while Saracen has the local market savvy.
“It’s a nice combination,” said Murphy, a principal with Insignia/ESG in Boston.
‘Ton of Activity’
Ironically, Infomart could not be happier to see ipark do well, with Martel maintaining that the commitment by Global Crossing solidified the area as a telecom destination. In that industry sector, he said, the more of a critical mass the better, because it means a greater presence of fiber optic cabling and increased electrical capacity demanded by the telecommunications industry.
Telecom users “know the power is there, because Global wouldn’t have gone there otherwise,” Martel said. “It just legitimizes the area for other companies.”
Martel, who is marketing the space with colleague Curtis Oberg, said Informart is also enjoying strong interest, with multiple showings on a daily basis. While he declined to offer names, Martel said he believes two firms are about to commit to 100,000 square feet, and said there are plenty of others lining up for the remainder.
“There’s a ton of activity,” Martel said. “It is just unbelievable.”
Along with the fiber optic capabilities and a redundant power supply, the area’s close proximity to Route 128 and downtown Boston is another plus, said Saracen. While somewhat off the beaten path, he noted that both destinations are within a few minutes drive.
“If you put yourself in between the two, which we are, its very accessible,” Saracen said.
Along with the two telecommunications projects, Pleasant Street in Watertown is attracting other projects as well. One site close to Watertown Square is being pursued for an estimated 100,000 square feet of office/research space, while another nearby parcel has been targeted for at least 50 residential units, according to Watertown Planning Director Mark E. Boyle.
The advent of the telecommunications phenomenon comes at an interesting time for Watertown, which has seen its share of ups and downs economically. The town, for example, has successfully converted a surplus army property into a 37-acre mixed-use complex featuring 770,000 square feet of space, but did get bad news recently when Boston Scientific announced it would abandon most of its manufacturing operations in a series of former mill buildings near the Infomart site.
Boyle said the community is still waiting to see what impact Boston Scientific’s departure will have, but he was enthused by the advent of the telecommunications sector to that area.
“We’re pretty excited about it,” Boyle said. “It really is one of the last corridors in Watertown that has an opportunity for revitalization and redevelopment.”
Murphy said he believes the ipark venture will also prove a boon for Waltham, which already has one of the largest concentrations of office space along Route 128, sporting some of the suburbs’ highest rental rates. At ipark, Murphy said, activity has been so strong that the developers are considering adding a building on some adjacent land, providing upwards of 100,000 square feet of additional space.
Murphy said he is also bullish about telecommunications real estate demand long-term, noting that the computer industry still has a long way to catch up with the consumer penetration most appliances enjoy. Although work remains to be done at ipark, Murphy said Insignia/ESG hopes to become a leading brokerage company throughout the region.
“This is an industry that we believe is on the cutting edge and just beginning,” he said. “It’s definitely something we are going to concentrate on.”