Marlborough Campus Sale Is Latest To Shake MetroWest Market
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The Campus at Marlborough was sold to Hines Global REIT for $103 million.
The sale of The Campus at Marlborough for $103 million to a Houston-based investment real estate firm last week marks the latest major development in the MetroWest commercial real estate market.
Recent happenings have made the city a buzzword in commercial real estate circles, said a commercial real estate broker familiar with the area.
The sale of The Campus adds to the complexity of the commercial real estate scene in Marlborough. Adjacent to The Campus - consisting of three fully leased buildings totaling 530,000 square feet - is the former Hewlett Packard manufacturing plant and next to that is the Fidelity campus. By next year the two properties will both be vacant, leaving more than 1.2 million square feet of empty space along 495.
And The Campus has room for another 650,000 square feet of undeveloped space at its site.
"Marlborough seems to be talked a lot about nowadays," said Christopher Tosti, executive vice president and partner at CB Richard Ellis, which is marketing the HP site. "There is a lot going on there."
Competitive Balance
Tosti and other officials in MetroWest are playing down the notion that The Campus sale will disrupt the market. Because the building is fully leased out, Tosti said the sale does not have any direct impact on other nearby properties.
"They're apples and oranges," Tosti said.
Notably, the HP and Fidelity sites are vacant or soon-to-be vacant large campus-style buildings, whereas The Campus is a large multitenant building that is fully leased.
But officials with Hines are marketing the undeveloped space at The Campus on a build-to-suit basis, meaning it will be developed if and when the right tenant comes along.
Officials with HP are doing the same.
Tosti said the HP site could be used for a variety of purposes, including a single-user, campus-style tenant or a site where multiple businesses would rent out space.
David Perry, a senior vice president in the Hines Boston office, said the undeveloped land at The Campus is equally flexible.
Hines has been operating in New England since the 1980s, focusing mostly on suburban office development in the Boston and Cambridge area.
Perry said The Campus has had steady lease activity, even during the economic downturn of the past few years. The entirety of the three-building Campus complex is Class A office space, which means it is high quality.
"It's a very unique and attractive site, with high-quality buildings and high-quality tenants," he said.
Class A spaces have seen lower vacancy rates and higher asking rents compared to the Class B and C office space markets in recent quarters, Perry noted.
He said Hines officials are already out meeting with potential users of the undeveloped land at the site but there is no timeframe of when the land will be developed.
Hines purchased the site from Bel Marlborough I LLC and Bel Marlborough II LLC, a firm associated with Boston-based real estate investment firm Eaton Vance.
Tosti, who is working with the new owners of the HP site in Marlborough, isn't necessarily worried about competition yet. Despite there being three potentially major development projects all in the same MetroWest community, Tosti said in time there will be a market for all of them.
"Clearly some will get going sooner than others," he said. "But all three of these projects can win."
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