Fidelity Move Is Felt In MetroWest Commercial Real Estate Market
The effects of Fidelity Investments' decision to vacate its Marlborough campus are already being felt in the MetroWest commercial real estate market, according to a report by Boston-based tracking firm Colliers International.
Colliers said third-quarter vacancy rates in the central region of Route 495 region jumped above 30 percent, in large part because of Fidelity's move to vacate 650,000 square feet of office space in Marlborough.
Fidelity announced plans to move its employees out of the site by the end of the next year, and according to Colliers, the process has already begun.
Colliers reported an overall negative absorption - meaning recently vacated space- of 765,000 square feet of office space in the 495 region, with 650,000 of that coming from Fidelity alone.
That drove up the commercial real estate vacancy rate in the central part of 495 - which is made up of the Marlborough-Westborough-Southborough area - to 31.2 percent from 29.5 percent in the second quarter.
That compares to a 23 percent vacancy rate in the northern and southern parts of the 495 region.
A Closer Look
Fidelity spokesman Vincent Loporchio said the company still has more than 900 employees in Marlborough and that its move out of the city won't be complete until the end of next year. Fidelity's move out of the building has begun, but there was no confirmation from the company about how much space has been vacated so far.
The site is being actively marketed by Boston-based firm Cushman & Wakefield and Loporchio said the company is "pleased with the activity we have seen so far."
According to the Colliers report, the entire suburban Boston commercial real estate market, which includes Interstate 128, 495 and inner suburbs, had a steady vacancy rate between the second and third quarters of 21 percent.
The Interstate 128 market's vacancy rate was 19 percent, while the city of Worcester's vacancy rate was 15.2 percent. The 128 and 495 markets, however, are significantly larger than the Worcester market, which has only about 2 million square feet of leasable space, according to Colliers. That compares to more than 70 million square feet of space in the Route 128 area and 47 million square feet of space around Route 495.
Colliers predicts activity for smaller users of less than 20,000 square feet of space will increase between now and the end of the year, while asking rents will remain stable in the fourth quarter and into 2012.
Despite the news of a stagnant market, there is still leasing activity.
Franklin Sale
For example, Franklin-based Eagle Stainless Tubing recently bought a warehouse for $3 million in the Franklin Industrial Park.
The company, a distributor of stainless steel tubing, focusing mainly on cut-to-length and precision-made tubing, will use 36,000 square feet of its newly acquired space for expansion.
The building, located at 145 Constitution Blvd. in the Franklin Industrial Park, was formerly owned by Bill Donovan and his moving and storage company. Donovan no longer needed the warehouse space, so he sold the entire building to Eagle, which will use the warehousing space and lease the adjoining 7,000 square feet of office space to Donovan.
The move complements Eagle's 38,000-square-foot complex at 10 Discovery Way in Franklin and the company's recent lease of 9,100 square feet of space at 131 Fisher St. in Franklin.
The deal was brokered by Bret O'Brien of Greater Boston Commercial Properties, who represented the buyer, and Rick Kaplan of RE/Max Executive Realty Commercial Division.
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