Northern 495 Belt Posts Strong Real Estate Quarter
New data from Boston-based commercial real estate tracking firm Colliers Meredith & Grew shows that the Northern Interstate 495 area had a strong third quarter.
Asking rent prices are low and vacancy rates are high across MetroWest and all along 495 compared to other areas in the state, Colliers found.
But, the Northern 495 area, which includes Littleton, Boxborough, Chelmsford and Westford, among other communities, posted some fairly significant real estate absorption in the most recent quarter.
The vacancy rate dropped from 24.4 percent to 23.4 percent between the second and third quarters, Colliers found. That includes the positive absorption of 259,000 square feet.
Transactions of note included IBM opening its MassLab center in Littleton and Westford; Goodrich Corp. leasing 180,000 square feet in Westford; and Sonus Networks Inc. leasing about 90,000 square feet of space also in Westford. Colliers acted as brokers in both the Goodrich and Sonus deals.
The vacancy rate along the southern region of I-495 vacancy rate remained level at 26.2 percent in the third quarter, with 11,000 square feet of negative absorption. The 495 West market dropped from 31.6 percent to 31 percent, with 105,000 square feet of positive absorption.
495 For Sale
Overall, the MetroWest and 495 commercial real estate market is considerably softer than Boston, Cambridge and other suburbs.
But, Christopher Tosti, executive vice president and partner at Boston brokerage firm CB Richard Ellis, said the lower asking rates and higher vacancy rates can be misleading.
"There's no question that Boston is the magnet that creates a lot of commercial real estate interest," he said. "But 495 is an interesting market with a lot of potential."
According to Boston commercial real estate tracking firm Richards Barry Joyce & Partners, asking rates in the MetroWest area dropped about 6 percent in the most recent quarter to $19.16 per square foot for Class A office space. That compares to an average asking price of $25.90 in the Interstate 128 market, which dropped 2 percent, and a $38.81 per square foot asking price in Cambridge for Class A office space.
Because asking rates are low and vacancy rates are high, it's a good time for companies to look at the area, Tosti said.
"495 is on sale," he said. "You can get some great deals right now."
Tosti said even in a good market it is common to see asking rates lower and vacancy rates higher in MetroWest and along 495. The disparity, he said, is larger now than it has been in previous years.
Still, he said, the market has some "major players."
He mentioned, for example, TJX Cos. Inc., Staples Inc., EMC Corp., and Bose Corp., all of which have their international headquarters in the MetroWest area. Plus, Genzyme Corp. has its largest facility in the state in Framingham.
"These are some of the strongest employers in the state," he said.
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