Boston Sports Club is leasing 58,000 sf on the first floor of the building for a 15-year term. Bob Fitzgerald of NAI Hunneman represented the tenant in the deal, while Bob Doherty, vice president of brokerage, and Steve Faber, vice president of asset management, both of the Beal Cos., represented property owner Harvard University.
In the second deal, BR+A Consulting is leasing 58,000 sf on the second and third floors of the building. The company is relocating from Soldiers Field Road in a substantial increase in its space. Doherty along with Peter Nichols, senior vice president and partner of the Beal Cos., represented Harvard in the transaction and procured the tenant.
When Harvard bought the 770,000-sf Arsenal nearly three years ago, Arthur D. Little had a master lease on 311 Arsenal, thinking it would ultimately use the space for its expansion. The company subleased most of the space to a number of dot.com companies but eventually ADL went bankrupt before it ever occupied the space itself.
According to Doherty, 95% of the dotcom companies in the building also went under leaving a nearly vacant building. "Harvard has deep pockets and was able to weather the storm," Doherty tells GlobeSt.com. "They got the place re-leased." He declined to reveal the third new tenant that signed a letter of intent for 100,000 sf of space in the building other than to say that it is a high-tech company that develops proprietary software.
Harvard has also managed to nearly lease up the rest of the former military base, which was on its way to being nearly 50% empty when the university bought complex. Harvard Business School is in 400 North Beacon St.; 97 North Beacon St. and 400 Talcott are leased up, while 200 Talcott is the headquarters for Bright Horizons. Recently renovated 100 Talcott is about 85% leased; 343 Arsenal is leased up as is One Kingsbury and Two Kingsbury is being used as a management office.
Doherty says that most of the deals were done in the first half of the year. "We saw a big uptick in activity then," he says, adding that most of the deals were for expansions. "It's a positive sign for the market but we won't be back to where we were for a while." According to Doherty, office space in Watertown goes for between the low to mid $20s per sf.
Arsenal on the Charles is the largest speculative office redevelopment in the greater Boston area. Harvard bought the complex for $160 million from O'Neill Properties after the town spent millions fixing up the site, banking on the property tax revenue. The town objected to its ownership by a tax-exempt educational institution, but eventually the university worked out a deal with the town if it converts the site to educational use.
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