Focus on suburban real estate: No tenants? No problem
Andrew Maher and his team at Anchor Line Partners roll the dice in Waltham
Nov 13, 2015, 6:00am EST Updated Nov 13, 2015, 8:49am EST
Catherine Carlock
Real Estate Editor
Boston Business Journal
From the outside, 200 Smith St. in Waltham has the look of a fortress with impenetrable gray metal walls spanning the length of a parking lot, few visible windows and one lone entrance....Inside, concrete floors stretch the length of multiple football fields, all on one floorplate…..
Anchor Line won a competitive bid in June to acquire the 250,000-square-foot warehouse and accompanying three-story, 100,000-square-foot office space, Maher said. The firm has ambitious plans to create upward of 400,000 square feet of flexible office and lab space.
And they’re doing it all on spec.
The development comes at a time when escalating rents and tight inventory is guiding many business leaders to consider the suburbs, after more than a decade of high-profile companies abandoning the Interstate 95 and 495 belts in favor of the burgeoning urban centers of Boston and Cambridge…..
But spec development in Waltham, a suburb 15 miles west of Boston’s central business district, is more of a gamble. But it’s one Maher says he is sure will pay off…..
“Everyone, when they come over that threshold, there’s a big, ‘Oh, my God’ moment,” Maher said on a recent tour of the former USPS facility. “I just have to get them through the door.”….
At its peak in the mid 1990s, the USPS distribution center employed 1,100 across three shifts, sorting 13 million pieces of mail daily. But after the recent recession and an imploding business model, that dwindled to 3 million pieces of mail each day. The USPS decommissioned the property this decade, shifting the sorting to facilities along the Fort Point Channel in South Boston and Billerica.
The USPS then put the Waltham facility out to bid, in a deal lead by brokerage CBRE.
“It was really stiff competition to get it,” Maher said. But he and Anchor Line had arranged a $39.5 million acquisition, part of an deal that included $88 million in acquisition and construction financing from New York-based investment management firm AllianceBernstein…..
‘Urbanizing this location’
The USPS moved out of 200 Smith St. this summer, taking thousands of pounds of machinery valued at about $10 million with them, and leaving Maher, Amendolare and Chaisson with an empty, expansive warehouse….
“You can definitely see them understanding how it’s going to function when it’s done,” Maher said. “Some of them look at it as a way of creating a culture they don’t already have. … That opportunity to create that culture is something we’re really trying to sell, and they get it.”
The pitch also is tailored to cost-conscious CFOs; Anchor Line is marketing the property in the low $40s per square foot for office rent, a substantial discount from the $60-to-$70 asking rents for Class-A space in Boston and Cambridge.
Beyond lease rates, Maher and Anchor Line hope to lure tenants with amenities including walking trails on the 36-acre campus, a cafeteria and fitness center, gaming systems, and a bike room and repair shop. The facility will also have a shuttle service to the Alewife MBTA Red Line station — something Maher said is second only to the cafeteria in terms of importance of drawing in tenants with young employee bases.
“It’s urbanizing this location,” he said….
Anchor Line has retained CBT Architects — a Boston-based firm with a portfolio chock full of high-profile urban Boston projects — for the facility’s design. Paul Finger Associates of Waltham is leading the landscape design…
Anchor Line hopes to have the facility — which it has named Post @ 200 Smith — ready for tenants in mid-2017…..
“We’re going to be able to deliver a product to this market that no one has seen on the Northeast Coast,” she said.
Catherine Carlock covers Greater Boston's commercial real estate industry.
