"We're happy," Lincoln Property Co. SVP and regional director John D. Miller tells GlobeSt.com, after he and colleague Jeffrey C. Moore represented MetLife in negotiating the 10-year lease for all 180,000 sf in the nine-story building. According to Miller, whose firm is leasing and management agent for One, Two and Three Cambridge Place, "it's a positive deal for the tenant and a very good outcome for MetLife." CDM was guided by Cresa Partners CEO William Goade and principals Christopher Crooks and Adam Subber.
Industry observers claim MetLife lowered its rental rate once CDM showed the firm was serious about leaving. That departure was first reported by GlobeSt.com on March 24th, unveiling a bifurcated plan to have an office south of Boston and another north. According to sources, CDM had toured several buildings on the South Shore, and was about to lease a Woburn property owned by the Campanelli Cos. that would satisfy the north requirement. GlobeSt.com then reported that CDM had suddenly ended its search and agreed to keep the headquarters at One Cambridge Place, where the company has been since the building came on line in the late 1990s.
Citing confidentiality agreements, Miller declined comment on specifics, but he characterizes the rate as "competitive" compared to recently achieved deals. Although Microsoft's blockbuster lease at One Memorial Dr. last summer carried a rent into the low $70s per sf, the market rate is substantially below that range. Richards Barry Joyce & Partners puts the average asking rent for class A space in Cambridge at $52.97 per sf. Miller would only say MetLife "recognized the value" of having CDM as a tenant enough to work diligently to retain the company. The firm would have achieved some cost savings in departing, he says, but Miller maintains CDM benefits from avoiding the disruptions fomented in relocating such a sizeable operation. Efforts to contact CDM officials by press deadline were unsuccessful.
MetLife had begun shopping the space at One Cambridge Place prior to the 11th hour talks. Miller says the group had received an encouraging response, but concurs that the preferred alternative was to keep CDM. The big winner, however, could be the city of Cambridge itself, having staved off the looming loss of an internationally known company that had called the city home for nearly 20 years. "There's no doubt this is a positive thing for the Cambridge market," says Miller, a notion seconded by another local landlord in the midst of shopping a large block of space at a nearby property. "It's a huge relief," says the official. "The last thing we wanted was 180,000 square feet coming out right now."
The lack of overall supply in Cambridge would have been welcomed by tenants, but leasing activity in the opening quarter was actually down following a brisk 2007. RBJ estimates negative net absorption for Cambridge of 73,000 sf, and indicates it is the first time in nine quarters that absorption for the 13-million-sf market finished in the red. According to RBJ, 18 Cambridge buildings lost occupancy versus 16 that had their filled space increase. Last year saw several longtime Cambridge tenants exit for the suburbs, typically relocating in the Route 128 Central belt.
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