NORTHBOROUGH, MA-In one of the largest industrial leases of 2007, a specialty division of Federal Express has renewed for more than 180,000-sf at One Beeman Rd. The 343,000-sf distribution facility is owned by MM Industrial Beeman Road LLC, an entity managed by TA Realty Associates of Boston.

Broker Paul Leone says the five-year agreement underscores "a very good business relationship" between MM and FedEx, which operates a SmartPost division from the facility. SmartPost matriculates business-to-consumer packages that are low weight and less time sensitive than other mail. The idea includes use of the United States Postal Service for final delivery.

"One Beeman Rd. is an excellent match for FedEx SmartPost," says Leone. A VP at Richards Barry Joyce & Partners, Leone teamed with RBJ principal John Lashar as exclusive leasing agents to negotiate terms on behalf of the landlord. Kirk Bittel of Fischer & Co. brokered the deal for FedEx.

TA Realty Associates secured One Beeman Rd. in 2005 for $21.4 million. Among the attributes mentioned by Leone are ceiling heights reaching 30 feet, a dimension usually reserved for newer properties. One Beeman Rd. is at full occupancy and commands top market rents even with its 25th anniversary looming in 2008 and speculative industrial space being heaped upon the region in the past two years. One Beeman Rd. "has held up very well and will continue to be a good asset for the ownership," says Leone. The extension with FedEx, a group known for its sophisticated analysis of CRE operations, is a testimony to One Beeman Rd.'s functionality, he offers.

FedEx also occupies space at Invesco Real Estate's 260,000-sf 55 Lyman St. in Northborough, one of the new spec projects that is located less than a half-mile from One Beeman Rd. That FedEx endorsement, says Leone, further validates the community and the Interstate 495 West warehouse market. The namesake roadway provides connections to every New England state, and nearby Route 9 and the Massachusetts Turnpike also intersect the region, enhancing east/west market coverage. "There's a critical mass of space, and it has to do with where [I-495 West] is situated," concurs Leone. Efficiency is especially desired given rising fuel costs, he says, further benefiting Northborough. The I-495 West warehouse submarket consists of 6.79 million sf, making it among New England's largest industrial enclaves after southern Massachusetts.

According to RBJ director of research Brendan Carroll, I-495 West has a 20.7% vacancy rate. Leone, however, maintains that the empty space is in older industrial buildings whose constitution is either not large enough or would require extensive investment to revitalize. The newer inventory for I-495 West has a vacancy rate in the single digits, Leone says, and the leasing environment appears to be healthy going into the mid-year.