MetroWest495 Biz

MetroWest495 Biz | October 2014 11 When it comes to reaching the Central Mass market, no group of radio stations has the POWER to talk to as many of your potential customers as we do. Our tOtal Weekly listeners WOuld fill MeChaniCs hall 400 tiMes! That's right. Over 616,000 people tune into WXLO, The Pike and WORC. Are they hearing about your business these days? Put the power of our family of stations to work for you today! * Nielson/Arbitron / 18+ Adults/ Fall 2013 NRD / Monday-Sunday 6am – 12pm REACH We'd like to share with you our proven strategies to help make your business become "known before its needed" Call John Sutherland or Bob Goodell today at 508-752-1045 Investors pounce on biggest opportunities in decades D evelopers understand that real estate is cycli- cal. The cycle we're entering is similar to what Greater Boston markets have experi- enced before. Companies large and small are mov- ing from high-priced space in the city and nearby markets toward more cost-effective sites in suburban areas such as I-495 and MetroWest. Since the 2008 credit crisis, the economy has expe- rienced consistent, albeit sluggish, recovery, creating ample opportunities for tenants, small local busi- nesses, real estate owners and investors. In recent years, rents for Class A — or top of the line — office space in Boston and nearby communi- ties such as Cambridge have seen prices skyrocket well into the hundreds of dollars per square foot, driving companies from these urban areas. Initially, tenants looking for Class A space found shelter in the Route 128 belt, which provided many of the same amenities found in Boston, but cheaper. But according to research done by Colliers Inter- national, absorption rates in the Route 128 market increased more than 200 percent between the second quarters of 2013 and 2014, forcing rents upward. Current rents for Class A office space in the 128 mar- ket range from the high $20s to low $40s per square foot. This is causing tenants searching for Class A space to seek cheaper alternatives. The 495/MetroWest market is one of the last remaining submarkets that still provide companies with attractive solutions. Current rent prices within this market range from a more modest $17 to $22 per square foot. Rents within the I-495 area before the credit crisis peaked at $27 to $30, so there is still tremendous value there. Certain communities, such as Marlborough and Westborough, have been at the forefront of the recovery in the I-495 market. Marlborough's and Westborough's economic development committees, working with municipal officials, have made a tre- mendous effort to bring large, prominent businesses to MetroWest. Recent examples include Genzyme, which signed a seven-year lease for 114,000 square feet of space at One Research Drive in Westbor- ough. And Marlborough shook off the 2011 exodus of Fidelity Investments when TJX Cos. bought the property once occupied by the mutual fund giant and moved 1,600 employees into the city. Officials in both communities recognize the posi- tive impact such real estate transactions have on local businesses. Their willingness to work with property owners to ensure quick turnaround times when buildings need upgrading or expansion provide a positive experience, which fosters continued growth. MetroWest real estate owners and investment firms are responding by acquiring older office build- ings and refurbishing them to their previous Class-A statures. These new owners and investors are buying at massive discounts as they look to protect and diversify their assets. This allows them to plow sig- nificant capital back into these buildings to modern- ize and customize them to tenant needs. My businesses, Ferris Development and Fer- ris Capital of Marlborough, have been acquiring local Class A office buildings since 2010. The most recent transaction, One Research Drive in Westbor- ough, was bought at just a fraction of the building's 2005 sale price of $55.5 million. Aggressive capital campaigns to upgrade common areas have attracted major tenants, including Genzyme. The next few years will likely mean higher sale prices and rents as office buildings fill up again as businesses inside Route 128 look west for lower rents, less traffic and better "quality of life" options for their employees. Investors who are shrewd enough to capitalize on one of the biggest cyclical opportunities in MetroWest real estate in decades will be rewarded handsomely. Meanwhile, local small businesses stand to gain, too. Construction upgrades in the region suggest a major rebound ahead for the broader local economy. Each new lease brings with it significant new work for local plumbers, masons, carpenters, electricians, landscapers and telecom install- ers. n reaL angLe BY DAVID FERRIS Special to MetroWest495 Biz David Ferris is founder and CEO of Ferris Development and Ferris Capital, both based in Marlborough.

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