In the larger of the commitments, AARP Financial renewed and expanded into 18,000 sf at Two Highwood Dr., while medical devices company Mitralign Inc. is taking 17,000 sf at Three Highwood Dr. The park has three buildings and a total of 278,000 sf.
"We're very pleased to have these tenants stay at Highwood," says Cushman & Wakefield broker Matt Adams, who negotiated on behalf of BPG along with colleague David Pergola. "It bodes well to be able to keep them." CB Richard Ellis principal Mark Reardon, who represented Mitralign, says the firm mulled alternative locations before opting to sign directly for three years. Reardon cites "great access" and professional management of Highwood Office Park as reasons the complex won out. "They were great to deal with," he says of BPG. Joining Reardon in orchestrating the Mitralign lease were CBRE VP Jason Levendusky and associate Jake Borden.
Exclusive leasing agents for the park, Adams and Pergola also assisted BPG in the AARP Financial lease, a 10-year deal in which the firm doubled in size. Two Highwood Dr. is a two-story, 82,000-sf property that BPG has upgraded substantially since buying the park in 2005, including the addition of a café and fitness center. An ongoing capital improvements campaign is also improving the park's common areas and lobbies, renovating the restrooms and modernizing lights and fixtures. "The buildings are looking really good now," says Adams.
BPG asset manager Michael Rota says he is pleased by the level of interest in Highwood, with the firm presently working on three serious prospects that would take down another 35,000 sf if they land. "We're getting some good looks," says Rota, whose firm is able to accommodate tenants needing between 3,500 and 20,000 sf. Most of the activity has been from small-sized and mid-sized companies, he says.
Coming off one of its best years ever, Interstate 495 North slowed in the first quarter, but market reports for that stretch are scattered. Colliers Meredith & Grew indicates 44,000 sf of positive absorption, while CBRE shows a gain of 78,000 sf. Jones Lang LaSalle, on the other hand, recorded a drop of 111,000 sf, and C&W puts absorption in the red by 190,000 sf. Despite that dire statistic, Adams insists I-495 North is faring well to date in 2008. "We've been busy," concurs Reardon. Some observers claim the negative outcomes are a result of a few large sublease availabilities that arose during the quarter, including a 110,000-sf offering in Chelmsford. Reports often vary because of divergent definitions for when space is available and other differences, including size of the sampling.
In any event, Rota expresses optimism about the coming quarter for both Highwood Office Park and I-495 North in general. Technology and software companies are increasing their demand needs, according to CBRE, while life sciences companies and defense-related firms are also filling up space in the market I-495 North still has product to burn off, however—CBRE puts the current vacancy rate at 27.9%, highest in the suburbs. Financial terms of the Highwood leases were not provided, but JLL puts the average asking rent in I-495 at $20.63 per sf.
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