The South Suburban Office and Industrial Markets Continue to Show Signs of Improvement
Source:New England Real Estate Journal October 27, 2006The south suburban office and industrial markets continue to show signs of improvement Heading into fourth quarter of 2006, the south suburban office and industrial markets continue to show signs of improvement with decreased vacancy rates and higher lease rates when compared to one year ago.
The Rte. 128 south office market from Quincy/Braintree to Westwood consists of approximately 14.3 million s/f. There is currently a 17% vacancy rate which is down from 19% at year end 2005 but the same as it was in 2003 and 2004. Rental rates for Class A and Class B space have increased, and we are seeing leases signed in the $19.50 per s/f to $22 per s/f range, about a 5% increase over a year ago. Leases typically include a specific tenant improvement allowance of $20 per s/f to $25 per s/f included in the above rents. It seems the days of full “turn key” build outs are gone. Landlords are reluctant to commit to firm construction prices while causing tenants to exercise some control over their spending. Rent concessions are also on the decline. As rental rates are holding firm, free rent has been limited to 1 month for most 5 year deals.
Rader Properties dm David Mitchell For the moment, there is still plenty of opportunity for most tenants. There are currently 10 buildings in the South/128 Market which can accommodate a 50,000 s/f foot requirement and four which could handle a 100,000 s/f requirement.
Year to date, we have seen some significant transactions including the Norwell Visiting Nurses lease of 12,000 s/f at 91 Longwater Circle, Norwell; The Guardian Life Insurance Company signed 2 leases - one for 18,725 s/f at 1250 Hancock St., Quincy and one for 8,400 s/f at One Derby St., Hingham; and J. Jill Group, Inc. whom consolidated and renewed its lease for 127,000 s/f at 4 Batterymarch Park, Quincy.
New construction along southern Rte. 128 has been limited. The most notable deal this year is a 350,000 s/f headquarters and back office building being built by A. W. Perry for Blue Cross Blue Shield of Mass. located just off Rte. 3 on the Hingham/Rockland town lines, this building will be sold to Blue Cross upon completion.
The industrial markets south of Boston continue to show signs of improvement, totaling 53 million s/f with a vacancy rate of 11% along Rte. 128 and 16% along 495 south. Market activity continues to be moderate but steady. The continuing shift in Mass. from the need for manufacturing buildings to distribution facilities continues to be an issue for many south shore industrial buildings. This market is dominated with older 18’ to 20’ clear manufacturing buildings. Most are leased, and due to their preferred locations; they remain viable. However, most companies looking for space want the higher stud heights for racking and distribution. This has led to a continued demand for build-to-suit projects. With very little land available within the I-495 belt, these sites have commanded premium pricing. For example, Enterprise Park of Marshfield, a 135 acre, Master- Planned business park located just off Rte. 139, has sites available starting at $250,000 per acre.
As the major industrial parks from Middleboro to Franklin are entering their final stages of development, this 320 acre site is being well received and can accommodate smaller or larger users. Campanelli Companies has also recognized the value of land just outside the 495 belt and is well positioned for new development at its 133 acre Master Planned Park at the Campanelli Business Park of Freetown, located just off Rte. 24.
Recent industrial/flex lease transactions include a 120,000 s/f lease signed 100 Campanelli Pkwy., Stoughton, with Electronic Wholesalers, Inc., a 51,202 s/f lease at 11 Norfolk St., Mansfield, with Global Fulfillment, a 347,500 s/f lease to Auto Parts International at 19 Mansfield Ave., Norton, and National Lumber’s lease of 104,000 s/f at 31 Middlesex Rd., Mansfield. Rental rates for industrial buildings are averaging $6.25 per s/f, NNN while flex buildings are achieving rents of $8 per s/f, NNN. The sale of industrial/flex buildings also continues to be strong. With the skyrocketing price of materials over the past 24 months, most existing buildings can be purchased below their replacement values. Well located industrial buildings are selling at prices ranging from $62 per s/f to $80 per s/f. For example, 980 Turnpike St., Canton, 60,000 s/f, recently sold for $65 per s/f. 675 Canton St., Canton, a 345,000 s/f distribution building located just off University Avenue, was purchased by AMB Property Corp. for $62 per s/f. At the other end of the price range, 105 Shawmut Rd., Canton, a 48,000 s/f industrial building sold for $88 per s/f and 70 Shawmut Rd. sold for $85 per s/f.
With no new speculative office or industrial buildings scheduled to come on the market over then next 12 months, we should see the markets tighten and generally improve for landlords. Limited job growth and high construction costs seem to be the biggest variables effecting growth n the market, however, we are seeing corporations committing to additional space and planning for future growth.
David Mitchell is a partner, Rader Properties, Inc., Norwell, Mass.
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By Julie Jette
After three years of searching for a new headquarters, environmental firm Clean Harbors Inc. will relocate to Norwell next year.
The move will consolidate the company’s headquarters on Washington Street in Braintree, operations on Wood Road in
Braintree and a training center in Kingston, into space at 42 Longwater Drive in Norwell’s Assinippi Park. The company
will expand from the nearly 80,000 square feet spread among locations to 104,000 square feet in one office building.
Clean Harbors has needed more space since buying its largest rival, Safety-Kleen of Columbia, S.C., in 2002, general counsel William
Geary said. With Safety-Kleen, Clean Harbors became one of the largest hazardous waste contractors in North America.
“For us, the last three years have been a world of difference in terms of the size of the company,” Geary said. “Since
we completed the acquisition, our staffing needs have grown.”
Clean Harbors will move 375 to 400 employees into the new building. The company has 650 workers in eastern Massachusetts and 3,700 at
locations throughout the United States and Canada.
Geary said the first group of employees won't move until next year, and the last will likely not move until 2007. The company has six
to 18 months remaining on teh leases of its current thre locations, and recently signed a 16-year lease for 42 Longwater Drive.
"We needed to ensure that we had sufficient advance time to install our sophisticated IT systems," he said.
"The Longwater Drive building, owned by HRPT Realty Trust of Newton, has been vacant since 2002, when Deutsche Bank acquired Scudder
Investments, the tenant at the time. HRPT Realty Trust was represented by Trammell Crow Co. and Rader Properties represented Clean
Harbors in the transaction.
The property is assessed at $8 million, and the town received $86,852 in property taxes on it last year, according to records in
the Norwell tax assessors' and collector's offices.
3/10/2003
As one of the South Shore’s largest industrial deals, Rader Properties has negotiated, on behalf of CRA/Waste Management, a 20 year lease
at 260 Kenneth Welch Dr. 260 Kenneth Welch Dr. is a first class industrial facility comprising a total of 104,723 s/f situated on 10.91 acres.
Its features include steel frame and block construction, 31 ft. ceilings and 18 loading docks. The building was originally built for Paperama
and most recently used as a distribution facility for Shaw’s Supermarkets. CRA/Waste Mgmt. will occupy the entire building immediately.
They intend to use the property for the processing and re-use of alcoholic and non-alcoholic beverage containers as well as the processing of
unsold and outdated beverages.
The lease in Lakeville represents a significant growth in CRA’s business while enabling them to consolidate operations from several other
facilities including ones in Holbrook, Needham and Franklin. This new facility represents the center for Waste Mgmt’s. Northeastern United
States beverage processing operations and an expanding business segment for Waste Mgmt. According to Tim Cusson, regional manager for
CRA/Waste Mgmt., “After an exhaustive search for a site located south of Boston, we chose 260 Kenneth Welch Dr. for its location adjacent
to I-495 as well as its ability to offer CSX rail service, ample room for expansion and long-term growth. It is a quality building with
excellent ceiling height which will facilitate our operations.” David Mitchell and Jim Rader of Rader Props. conducted the property search
on behalf of CRA/Waste Mgmt. and were the sole brokers involved in this transaction. Shown (from left) are: David Mitchell, partner, Rader Props.;
Tim Cusson, regional manager, CRA/Waste Mgmt.; and Jim Rader, president, Rader Properties.
Article Source: www.rejournal.com
Clean Harbors inks Braintree expansion lease
Clean Harbors Environmental Services Inc. has leased 37,000 square feet in Braintree in one of the larger office deals on the South Shore this year.
Clean Harbors, which is headquartered in 40,000 square feet on Washington St. in Braintree, expanded into the second floor and more than half of the first
floor at 325 Wood Road in Braintree.
The Wood Road offices, which the company had leased years ago, is needed because of the company's acquisition of Safety-Kleen Chemical Services, which
is based in South Carolina. The company is expanding its accounting and other operations into the Wood Road offices.
David Mitchell and Jim Rader of Rader Properties Inc., a Norwell-based real estate firm, brokered the deal.
Article Source: www.bizjournal.com