The Verizon warehouse at 325 Turnpike Road (Route 9) in Southborough is for sale.
Verizon is hanging up on Southborough.
A Verizon Communications spokesman declined to discuss the sale. The New York-based telecommunications giant owns the 51.5-acre parcel that includes one building located behind a soccer field and hidden by a row of pine trees. It is assessed at $15.8 million. Since the 1960s, the company has stocked tools and reels of fiber and copper cable at the location.
“It’s a great site and quite functional as a warehouse for the time being,” said Garry Holmes, president of R.W. Holmes Realty Co. “Its highest and best use is as a first-class office park.”
But until the MetroWest office market rebounds, it’s unlikely that any investor will rush to build office space at the site, according to Richard Schuhwerk, a broker with Jones Lang LaSalle, a global commercial real estate company.
“No one will be in a hurry to make that location a Class A office park because the vacancy rate in MetroWest is still high,” he said. “We’re looking at a vacancies in the low 20 percent range. It’s the slowest recovering market. A year ago, it was in the high 20s. It’s slowly getting better. Route 128 is hot and so are Framingham and Natick where the vacancy rates in the single digits. But Southborough, Westborough and Marlborough have a ways to go.”
Vacancy rates in 495 West – an area that includes Southborough, Westborough and Marlborough – was 27.1 percent last month compared to 28.6 percent a year ago, according to Cushman & Wakefield’s midyear office report. Average Class A rents have increased slightly this summer to $20.56, up from $18.58 for the same period last year, researchers from the global real estate services firm said.
Philip DeSimone, a Jones Lang LaSalle managing director, said the Verizon facility goes on sale at a time when a number of parcels from 200,000 square feet to 1 million square feet are available in Southborough and nearby Marlborough and Westborough. Burlington-based Gutierrez Co. and Boston Properties, a real estate investment trust, own developable parcels in MetroWest, he noted.
In addition, a commercially zoned 21-acre parcel at Route 128 and Route 117 in Waltham is for sale by Rochester, N.Y.-based Scutti Enterprises for an undisclosed price, according to LoopNet Inc., a Web-based information services provider to the commercial real estate industry.
Still, DeSimone said the fortunes for the MetroWest office market could change as the vacancy rate falls. “It won’t take much to bring the vacancy rate to the teens,” he said. “Once that happens and rents climb, all of a sudden speculative buildings make sense. We are not too far away from that.”
Attention-Getter
Southborough is attracting attention from developers who are convinced the office market is on the rise while home sales stall. A 50,000-square-foot office building, a project of Capital Group Properties and Rosewood Construction, is under construction on the eastbound side of Southborough’s Route 9.
In addition, Southborough-based Bartolini Builders has plans for a parcel it owns across from the Verizon site. While nothing has been filed with town officials, discussion is under way for three 25,000-square-foot buildings that will be phased in. John Bartolini Jr., president of the building company, said he would have no comment on its plans until he has spoken to abutters.
Vera Kolias, Southborough’s planner, said the Verizon site is zoned for an industrial park. Among the allowed uses are office space, a publishing company, wholesale distribution, and light manufacturing, as well as research and development, she noted. Senior housing and over-55 residences also would be allowed with permission from the town.
The Verizon building is located in the middle of the site. The land contains at least one stream and wetlands. Kolias estimated that about half of the site is buildable. Any project over 50,000 square feet would require a special permit. Since the Verizon parcel abuts a residential neighborhood, any proposal is sure to be scrutinized by residents.
“You have residential neighbors and there have always been issues with trucking and lighting,” Kolias said. “Any new tenant or owner would have to work with the neighborhood and the town.”
While the parcel is not zoned for residential, the site could be developed as an affordable housing project under the state’s Chapter 40B statute. The so-called anti-snob zoning law allows developers to bypass local zoning if less than 10 percent of a community’s housing stock is deemed affordable. Only 3.4 percent of Southborough’s homes are considered affordable under state guidelines.
Officials already are considering a pair of 40B projects. AvalonBay has proposed 240 units on the eastbound side of Route 9, while Trammell Crow Residential hopes to build 200 units between the Red Roof Inn and the Central Park office, according to Southborough Selectman William Boland.
Amy Perlman, one of the brokers at CB Richard Ellis handling the sale, said Verizon has not set an asking price. Instead, a “call for offers” will be sent over the next two weeks to developers and investors who will be invited to tour the facility, she said. Bids will be accepted until an undetermined date later this summer, but she declined to provide further details.
“I don’t want you to think this is a stealth-secret type of process,” she said. “But I can’t comment on anything.”
