VistaPrint Inc. reportedly is close to signing a major office lease at Lexington’s 2 Ledgemont Center.
Offering a graphic example of the rebounding Route 128 Central commercial real estate market, VistaPrint Inc. is close to signing a major office lease at 2 Ledgemont Center in Lexington, according to industry sources. The high-end design and printing company reportedly is eyeing more than 160,000 square feet of space being vacated at 2 Ledgemont Center by Fresenius Medical Care Corp., a life sciences firm relocating to abutting Waltham.
“It is looking pretty likely that [2 Ledgemont Center] is where [VistaPrint] is going to go,” said one source familiar with the situation. While a lease has not yet been finalized, that source characterized a deal as being “imminent,” while several other industry professionals concurred that negotiations between VistaPrint and Ledgemont Center’s owners, the Beal Cos., are ongoing and approaching a positive completion.
One observer characterized VistaPrint’s discussions as being “at an advanced stage,” but officials at the firm’s regional headquarters at 100 Hayden Ave. in Lexington were less strident. “We don’t have any news of that,” said spokeswoman Tana Snyder, even questioning whether a space search is under way at all.
With its lease at 100 Hayden Ave. said to be expiring in early 2007, VistaPrint is indeed out seeking a new home, sources insisted, with the company having retained Trammell Crow Co. to assist in that endeavor, specifically principal Brian Hines and Senior Vice President Keith Gurtler. Hines declined comment on the situation, referring calls directly to VistaPrint.
Trammell Crow Co. is already representing the Beal Cos. to land a tenant for the Fresenius space, which totals close to 200,000 square feet. One of the team members on that assignment, principal John J. Boyle III, was mum on the leasing program at Ledgemont Center, which he is handling along with Hines, Gurtler, principal Joseph Fallon and Senior Associate Deborah Howerton. Officials at the Beal Cos. also did not respond to inquiries related to VistaPrint as of Banker & Tradesman’s press deadline.
Strong Resurgence
Given the asset’s reputation as one of the best office addresses in suburban Boston, 2 Ledgemont Center appears to be benefiting from the industry’s prolonged “flight-to-quality” trend that has been prevalent in Greater Boston’s office sector for the past few years. An award-winning structure designed by Jung/Brannen Architects, the property is set to undergo an extensive capital improvements program that is already winning accolades from some familiar with the plan.
“It is going to be one of the nicest parks on Route 128 once that [renovation] is completed,” said broker Richard M. Robinson of GVA Thompson Doyle Hennessey & Stevens. “It’s going to put them right up there with Bay Colony [Corporate Center] and Waltham Woods [Office Park],” both located in Waltham.
Although the offering may not last long, 2 Ledgemont Center also represents one of the few examples of large blocks of existing contiguous space in the central Route 128 market, noted Robinson, with nearly 200,000 square feet made available by Fresenius leaving for the Reservoir Woods complex. Trammell Crow also is listing agent for another 60,000 square feet available at One Ledgemont Center, a 175,000-square-foot property. The park also has the ability to produce another 150,000-square-foot building at the park, an opportunity that made have seemed unlikely to move forward prior to the submarket’s strong resurgence in recent months.
Even with a tepid opening quarter, central Route 128 has recovered so impressively that other developers in the area are also rattling their chains for speculative office construction, including Boston Properties and the Davis Marcus Partners, which just announced plans for additional expansion at Reservoir Woods. Sources also said that the owners of 307 Waverly Oaks Road in Waltham are moving forward with a speculative office building next door at 309 Waverly Oaks Road, a 4story building that would offer 140,000 square feet of space. “The steel is on the way,” one source said of the project, with a delivery anticipated for mid-2007. The property is owned by Beaver Group LLC, an affiliate of Duffy Assoc. Efforts to contact the developer to discuss that plan were unsuccessful.
Despite the slower than expected start to the year, Robinson said he believes the overall outlook for central Route 128 remains positive for the remainder of 2006. Velocity in recent months has been focused on tenants in the 12,000- to 15,000-square-foot range, he said, but there are several large requirements with lease expirations coming due during the next 18 to 36 months, he said, while life sciences companies from Cambridge continue turning their attention to the Route 128 market along the Route 2 corridor extending out from the Alewife district.
The investment sales market also has reflected the confidence for the core Route 128 office market, as evidenced by the slew of buildings being acquired in the past several months in Bedford, Lexington and Waltham. Such investors as Boston Properties, Broadway Partners and Normandy Real Estate Partners have poured into the area, following the lead of Beacon Capital Partners and its blockbuster acquisition of Bay Colony Corporate Center at the outset of 2005. Acquired just as the market was starting to turn for the better, the hefty price tag of more than $272 million raised eyebrows at the time, but the solid improvement appears to have justified Beacon’s investment.
The purchase seemed to anticipate rents into the $40 per square foot range, a level that has yet to be achieved. Even so, Robinson and others said some deals are bumping into the upper $30 range, although mid-$30s appears to be more common. While details of the VistaPrint agreement were not provided by any parties involved, one broker said the deal should be at least $30 per square foot and likely well above that threshold.
According to one broker, VistaPrint had recently narrowed its options to a property in Burlington and a few in Lexington, but Ledgemont Center appears to be the frontrunner at present. One source who has been tracking the negotiations predicted a lease will be in place shortly after Memorial Day, a timetable that would allow VistaPrint to be out of its current home by the lease expiration date. Given the proximity to its current operations at 100 Hayden Ave., the source noted that employee disruption would be minimized should the lease get signed. “I don’t think they will be disappointed,” added the source of any relocation to Ledgemont Center.
