Sanofi's moves contribute to major MetroWest vacancies
Photo | Grant Welker
One Research Drive in Westborough
MetroWest is facing some major office vacancies at a time when tenants may be reassessing where or how much space they need because of the coronavirus pandemic, a time that could challenge the area's office market or give it new opportunities.
Drugmaker Sanofi has left a major Westborough office building at One Research Drive, much of which is now being advertised for lease. The real estate firm CBRE is advertising for availability 109,000 of the four-story building's roughly 290,000 square feet. Park Place Technologies, a data center equipment manager listing a service operations center on Donald Lynch Boulevard in Marlborough, was reported by the Boston real estate firm Hunneman to have signed an 84,000-square-foot lease at the building.
Ferris Development Group, the owner of One Research Drive, isn't particularly worried about the major gap Sanofi left. The landlord has already backfilled about half of the 168,000 square feet Sanofi left behind, said Ryan O'Toole, an assistant asset manager for Ferris.
"This represents a massive opportunity for tenants who want to take advantage of state-of-the-art space which was left behind," O'Toole said, naming glass-walled offices, advanced technical capabilities and even unused designer furniture given up by the drugmaker.
Ferris, which also owns 4 and 8 Technology Drive just down the street in Westborough and 325 Donald Lynch Boulevard in Marlborough, has seen an uptick in potential office tenants, particularly from along the Route 128 corridor, as well as Framingham and Natick, O'Toole said. The firm expects companies to seek more square footage per employee as they spread workers apart more safely because of the pandemic.
Sanofi has been moving around its Massachusetts office space as it prepares to open a 900,000-square-foot facility in Cambridge next year. The French company has said it will consolidate its Massachusetts operations at the new center at the Cambridge Crossing development near Kendall Square but would keep a presence in Framingham.
The drugmaker opened a new Framingham manufacucturing facility last year on New York Avenue.
Sanofi sold two Framingham office buildings in May 2019 for about $20.5 million and leased back its space. The two-building site includes a total of about 65,000 square feet of space.
The real estate firm Colliers cited Sanofi as one of a group of larger office occupants whose moves are opening up larger amounts of empty office space in MetroWest in the second quarter. The area, with more than 21 million square feet of office and laboratory space, saw occupied square footage drop by 190,000 square feet in the quarter, putting the vacancy rate at 19.1%, Colliers reported. That's second worst in the Boston area behind only northern suburbs along the I-495 belt at 21.8%.
Colliers measures 10 communities in what it calls its I-495 West region, including Framingham, Hopkinton, Marlborough and Natick.
Despite higher vacancy rates in the suburbs compared to Boston and Cambridge, outlying communities aren't yet seeing as many subleases as companies give up office space in light of the pandemic. Colliers said it doesn't expect a reversal of companies looking to move into Boston or Cambridge from the suburbs — as in the case of Sanofi, Philips, Puma and others — but that talk exists in the market of companies considering suburban offices in addition to their city ones.
Another real estate analysis firm, Hunneman, counted 111,000 fewer square feet of occupied office space in MetroWest. Vacancy rates hit 12.4% in Framingham and Natick and 17.1% in the rest of MetroWest, including Marlborough, with both rates worse than the regional average of 10.5%.
Hunneman counted 1 million fewer occupied square feet in the second quarter across all suburban Greater Boston, extending to the I-495 belt. Hunneman attributed that to larger vacancies as well as pandemic-related occupancy changes.
Some notable MetroWest office tenants have elected to stay put, including Affirmed Networks' 62,000-square-foot lease in Acton, Hunneman reported. Among those expanding into the area are CRISPR Therapeutics, a Swiss biopharmaceutical gene editing company taking up 50,000 square feet at the former MetroWest Daily News offices on New York Avenue in Framingham.
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