WBDC, Berkeley Respond To Unum RFP
On a very tight deadline, the developers of Gateway Park and CitySquare expect to respond to a Unum Group request for proposals to build a new operations center in Worcester.
The RFP was issued just last week and responses are due today. Unum is looking to move from its current 400,000-square-foot complex off Chestnut Street into new, more modern digs.
The Worcester Business Development Corp. will submit a proposal today to build Unum new space at the WBDC's Gateway Park project, David Forsberg, the WBDC's president, confirmed.
Gateway Park is an office and biotechnology research and development park being developed by the WBDC and Worcester Polytechnic Institute.
Young Park, president of Berkeley Investments Inc., the Boston-based developer of the stalled $565 million CitySquare mixed-use project in downtown Worcester, said recently that Berkeley would submit a proposal to build Unum's new operations center at CitySquare.
"We are clearly one of the sites" Unum is interested in, Park said recently. "But it will be competitive."
Prime Locations
Unum has identified a handful of properties in Worcester that could accommodate its desire for about 175,000 square feet of new office space for its about 700 Worcester employees, according to J. Christopher Collins, Unum's senior vice president and general counsel.
"Our preference is to do the project in Worcester," Collins said, even though it may be the company's most expensive option. Worcester does not have enough existing office space for Unum to choose from. The city's office vacancy rate was just 10.6 percent during the third quarter, according to Colliers Meredith & Grew, the Boston-based commercial real estate broker representing Unum.
Real estate brokers and city economic development officials estimate that new, built-to-suit office space in Worcester would demand lease rates between $30 and $35 per square foot. According to Colliers, existing "premium" Class A office space in the boroughs and other towns at the westernmost reaches of Interstate 495 costs between $22 and $25 per square foot.
Dollars And Cents
Tim McGourthy, the city's economic development director, said lease rates between $30 and $35 are the highest the city could justify.
"New construction does cost more, but new construction can always provide modern, up-to-date, efficient space, layout and technology," McGourthy said. He said he hoped a new Unum office building would prompt other city office property owners to make building improvements that would satisfy demand and justify raising their rates, as well.
"There's demand out there," McGourthy said, "and we don't have the supply to meet it."
While "cost is always going to be a concern," Collins said, "we've mapped out pretty carefully where all our employees live and what their commute times are down to the individual. And part of it is we've been here for a long time."
Still, Unum, a Tennessee-based employee benefits provider, must determine "whether it makes sense" financially to stay in the city or move, Collins said. The company hasn't found a tipping point at which Worcester lease rates would definitely push the company out of the city, at least "not one that we're going to discuss right now," Collins said.
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