BJ's Westborough Move Buoys Market
FILE PHOTO
BJ's Wholesale is moving its headquarters from Natick to Westborough.
Recent confirmation of rumors that BJ's Wholesale Club would move its corporate headquarters from Natick to the former National Grid site in Westborough has been welcome news across MetroWest, especially for real estate owners and brokers.
"A rising tide floats all boats," said Christopher Egan, president of Westborough's Carruth Capital, which owns a handful of buildings near the National Grid site and a total of 10 in Westborough.
The National Grid site is located near the intersection of Route 9 and Interstate 495 and is considered by some real estate trackers as one of the premier sites in MetroWest. But that doesn't mean it has been immune from a nationwide commercial real estate slump.
Now, regional real estate watchers are expecting the BJ's move will only help bolster the area.
Center Of Gravity
"When you have a company like BJ's move in, that can create a wave of other companies that want to be close to a corporate headquarters," said John Kolb, a vice president of KBS Realty Advisers in Boston, which owns 1 Research Drive, known as the University of Phoenix Building, adjacent to the National Grid site.
National Grid announced that it would move its United States headquarters from Westborough to Waltham in 2007. The company's been gradually moving employees to its new headquarters since then. It still has some employees remaining in Westborough.
A corporate headquarters can attract auxiliary businesses such as design, insurance, public relations, banks, restaurants and others businesses that may be interested in nearby office space.
It also confirms the area as an attractive location for other national corporations to house their operations.
"Not only does this lease remove potential competition for real estate in the area, but it could provide a domino effect for other some vacancies filling up," Kolb said.
Marc Verrault, senior vice president at Carruth, isn't surprised by the strong performance of the area or the BJ's move to Westborough.
"It's a turbulent time in commercial real estate, but the National Grid site is an A plus location," he said. "Just as people consider Waltham ground zero for the 128 corridor, Westborough and this area are in many ways the central hub for 495."
Still, the area hasn't been spared from the softening of the commercial real estate market during the past few years.
Carruth owns one of the largest buildings in the area, 4400 Computer Drive, a two-building complex of more than 600,000 square feet that is completely full with PNC Bank and EMC Corp. as tenants.
The second largest building in the area, operated by Kolb at KBS Realty, is 1 Research Drive. Kolb said the 284,000 square-foot space is more than 90 percent leased.
Carruth also owns 200 Friberg Parkway, near the National Grid site, which is a 100,000 square-foot office park that has about 18 percent vacancy.
BJ's is set to move into the 282,000-square-foot, two-building National Grid site, located at 25 Research Drive, when its 15-year lease begins in February 2011. Neither BJ's nor National Grid officials would discuss financials of the deal.
David Ross, a principal at CresaPartners in Boston, tracks commercial real estate in MetroWest and said generally speaking MetroWest usually has higher vacancy rates than the 128 corridor and Boston. But, he cautioned that Cresa uses a broad geographic region to define MetroWest from Shrewsbury to Natick. The Natick, Framingham and Westborough areas tend to be stronger markets, competitive with the 128 belt.
Still, BJ's moving to Westborough does not bring down the overall vacancy rate in MetroWest because the company is moving within the region. To bring down MetroWest's overall commercial vacancy rate requires new companies moving into the region that were not located there before.
To get that, Ross said the overall economy needs to improve, companies need to add jobs and have a need for larger spaces.
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