Mass. State Agency Forsakes Boston for Suburbs with 114,000-SF Lease
- Mar 11, 2010
March 11, 2010
By Barbra Murray, Contributing Editor
Acting through its Division of Capital Asset Management and Maintenance, the Commonwealth of Boston has signed a lease with Griffith Properties L.L.C. for the Office of Health and Human Services (HHS) to occupy approximately 114,500 square feet at the HarborSouth Tower in Quincy, Mass. Industry experts predict the lease at the Class A facility could ultimately be one of the biggest new office leases in the Boston area for 2010.
HarborSouth, which sits less than 10 miles south of Boston at 100 Hancock St., was developed in 1983. Health insurance provider Blue Cross/Blue Shield had occupied the 204,800-square-foot building until the company relocated to Hingham three years ago, leaving behind an empty tenant roster.
“Griffith bought the building knowing it would be vacant,” Nat Kessler, First Vice President with real estate services firm CB Richard Ellis, told CPE; CBRE represented the landlord in the lease transaction.
After acquiring the property in 2007 for approximately $17.5 million, Griffith commenced a $16 million redevelopment program that concluded in 2008. The renovation added such amenities as a cafeteria, a fitness center, and LEED Silver Core & Shell certification.
“This certification is typically reserved for new construction,” Kessler said. “HarborSouth is the only LEED Silver Core & Shell-certified multi-tenanted office building in Southeast Massachusetts.”
HHS will occupy floors four through eight of the 10-story structure, consolidating employees from various sites in Boston. The state agency is just the type of tenant Griffith had designed the property to attract. “The state was focused on amenities for employees, accessibility to public transportation, high air quality,” Kessler said. “It’s a lower-cost alternative to space in Boston and you get the benefits of a new building.”
So, does the HHS deal mark an impending turnaround in the struggling Boston area office market? The average office vacancy rate is 9.4 percent in Boston and 17 percent in suburban Boston, as per a CBRE fourth quarter report.
“The lease is a very big deal, but I would not classify it as a trend,” Kessler said. “Hopefully it’s an early indicator that the market is slowly coming back.”
As for the Boston suburbs, the area could be getting more attention in the future. “We had a number of Boston-based companies that considered the property based on it being close to transportation and a lower cost alternative,” he said. “Hopefully, more tenants like HHS will consider the market south of Boston.”