Publisher Wolters Kluwer is just the latest tenant to sign on at the Stony Brook Office Park in Waltham, where recent deals together have topped the 100,000-square-foot mark.
Buoyed by the rising economic tide along central Route 128, deals are flowing at Stony Brook Office Park in Waltham, where more than 105,000 square feet has been leased this summer. The latest pact represents more than half of that space, with publisher Wolters Kluwer agreeing to take 56,000 square feet in Stony Brook’s Building III.
The 10-year lease, which will result in Wolters Kluwer relocating some employees from Boston’s Financial District, was cemented as a surge of new tenant space requirements began hitting the Route 128 landscape, among them PerkinElmer’s reported need for 100,000 square feet and an estimated 55,000 square feet being sought by UnitedHealthcare Group. Also, as reported last week on Banker & Tradesman’s Web site, www.bankerandtradesman.com, Instrumentation Laboratory is expected to ink a 400,000-square-foot pact at 180 Hartwell Road in Bedford. The firm currently occupies about half that amount of space in two buildings on nearby Hartwell Avenue in Lexington.
“It really bodes well for the market,” broker Alexander D. Dauria said of the surging activity. A senior vice president at Spaulding & Slye Colliers, Dauria and Assistant Vice President Jay Nugent have negotiated seven Stony Brook leases since being named exclusive agents last December by the landlords, a joint venture of Saracen Properties and Rockpoint Group LLC. Once the marketing effort took hold, tenants responded, so much so that Dauria said there are enough proposals in play to lease the remaining 140,000 square feet twice over.
Wolters Kluwer was represented in the negotiation by GVA Thompson Doyle Hennessey & Stevens principal John Hennessey and Richard M. Robinson, who were unavailable for comment. Acknowledging the rare out-migration from downtown Boston, Dauria said he believes the tenant was lured by a combination of physical quality achieved following a $12 million overhaul of the property, Stony Brook’s proximity to public transportation and the strength of the revitalized ownership team, which took over the park after Archon Group defaulted on a $64 million loan taken out at the height of Waltham’s boom times.
Saracen, which actually developed the park’s three buildings before selling to Archon in the late 1990s, possessed the local expertise to nurse Stony Brook back to health, said Dauria. “They really put the pedal to the metal,” he said of Saracen and Rockpoint. Other industry professionals have taken notice of Stony Brook’s resurgence after its repeated woes of the past few years, exacerbated by the departure of anchor tenant Parametric Technologies Corp. and the property’s subsequent financial collapse.
“The park shows very well,” Trammell Crow Co. principal John Boyle said of the 23-acre campus, which features 271,000 square feet in total. “It works for a lot of companies.”
Observers blamed the financial mess for keeping Stony Brook from enjoying success earlier, with some recalling a large lease to Pearson Education that was not written two years ago because the rents could not support the property’s debt.
Other firms taking space at Stony Brook in the latest wave are Auspice Corp., which leased 21,000 square feet; Great West Life Assurance Corp.; DDJ Capital Management; AmeriVault; Knowledge Management Assoc.; and the Odyssey Cos., which consists of the Patriot Financial Group and DolmatConnell & Partners.
Dauria declined to discuss terms such as the length of the leases or rental rates, but estimated that the Route 128 corridor near the Massachusetts Turnpike is averaging between $24 and $26 per square foot. Those prices appear to be headed upwards, added Dauria, whose firm recently conducted a survey of office buildings in the area and found space increasingly scarce.
For a user needing a block of more than 100,000 square feet, there are currently just two options remaining in that market, said Dauria, while there are just 10 properties that can accommodate users needing more than 50,000 square feet. Even with 17 properties sporting contiguous space for tenants needing 25,000 square feet, Dauria said he believes the pendulum is finally swinging back to the middle after favoring tenants since the start of the new millennium. One indication is the completion of three leases recently at nearby Waltham Woods that each averaged over $30 per square foot, with agreements signed at that rate by Avaya Inc., Square One Bank and JMH Capital. “Those are real deals that say a lot about where the market is headed,” said Dauria, who represented Waltham Woods in all three leases.
‘Getting Closer’
Although the $30 mark is reserved for only prime suburban buildings such as Bay Colony Corporate Center or Waltham Woods, conditions have shifted so significantly that Dauria forecast the prospect of speculative office construction in the near future, perhaps as soon as 18 months from now. The overall availability rate for Class A space in the Route 128/Massachusetts Turnpike market has dropped from a high of 33 percent in 2003 to a current level of 14 percent, said Dauria, while the overall market has seen a decline in availability from 22 percent last year to 19.6 percent as the end of the third quarter approaches this year. Rents tend to begin rising once the availability rate drops under 13 percent, said Dauria. “We’re not there yet, but it is getting closer,” said Dauria. “A lot of the space has been absorbed.”
Boyle agreed that the central Route 128 strip has rebounded impressively, although his firm has been active throughout the region in recent months, leasing 110,000 square feet to SolidWorks at 300 Baker Ave. in Concord and another 18,000 square feet at 3 Burlington Woods Drive in Burlington to Evare, a deal he and Trammell Crow Senior Associate David Boyle just negotiated for on behalf of the tenant, with Spaulding & Slye Colliers principal Tamie Thompson representing the landlord, Finard & Co.
John Boyle also confirmed that he has been retained by UnitedHealthcare Group for a possible lease in the central Route 128 area, although he declined to discuss specifics of the campaign. “We are reviewing alternatives,” he said, offering no further insight. Meanwhile, William D. Bailey of Spaulding & Slye Colliers is said to be representing PerkinElmer in its space search. The firm currently is located at the Wellesley Office Park, which sources maintain is unable to accommodate PerkinElmer’s unique real estate needs. Bailey was unavailable for comment, but sources said PerkinElmer would be seeking more space than its current occupancy of about 60,000 square feet.
As reported in last week’s Web story, Instrumentation Laboratory has hired George Nugent of CBRE/Whittier Partners to broker the Hartwell Road deal, one which was said to be on the verge of completion as of Banker & Tradesman’s press deadline. Nugent and the landlord’s broker from Richards Barry Joyce & Partners did not respond to inquiries, while the building’s owner, Vincent O’Neill, declined comment when contacted last week. O’Neill is the president of VinCo Properties, which purchased 180 Hartwell Road from National Development last year. The hulking complex previously was occupied by Raytheon Corp.
As for Stony Brook, Dauria said he anticipates more leases will be signed over the near term, but would not identify any candidates for the space. In the deals that have been consummated, Jay Nugent and Phil DeSimone negotiated for Auspice, Great West was represented by JoAnn Duerr of Mohr Partners, and DDJ employed Neil Schneider of McCall & Almy. Jay Nugent also was the broker for AmeriVault, Joseph Sciolla and Shawn McDonough of Cresa Partners were agents for Knowledge Management, and Dauria acted on behalf of the Odyssey Cos.
