One thing is for sure about the tenant focusing in on National Development’s Lake Williams Corporate Center in Marlborough: There won’t be any need for a credit check.
According to industry sources, Fidelity Investments is negotiating to take an estimated 150,000 square feet at Lake Williams, a well-located property where the owners recently secured another company that will help launch the park’s second building. Others said the requirement could approach 300,000 square feet. If Fidelity goes for the maximum space available, it would complete the build-out of the complex, according to one source familiar with the deal.
“I’ve heard it’s as good as done,” said one Marlborough landlord tracking the deal. Another source maintained that Fidelity has signed a letter of intent for at least one of the buildings, and could be closing in on tying up the other property.
At this point, most of the sides are keeping mum. Fidelity spokeswoman Anne Crowley would only say, “We don’t have anything to announce at this point,” while calls to National Development at its Newton headquarters were not returned by B&T’s press deadline.
Insignia/ESG principal Stephen J. Murphy, whose firm is marketing the park, did confirm that negotiations are underway with Fidelity, acknowledging that “we are talking to them about Lake Williams and working to solve their needs there.” Murphy would not, however, discuss the status of the talks, or just how much space Fidelity is looking at taking.
Fidelity certainly does have a major presence in the area, having moved thousands of employees to Marlborough in the early 1990s. The mutual fund giant acquired two former Digital Equipment Corp. buildings there in 1994 and 1995 for a total of $29.6 million, but has apparently outgrown those quarters.
The company currently has about 800,000 square feet in Marlborough, said Crowley, including a leased building on Williams Street where it occupies about 130,000 square feet. Most of the estimated 3,000 employees work in the firm’s 401(k) and retirement benefits divisions.
‘Out of Whack’
Whatever the dealings with Fidelity, Murphy said he believes National Development is in a solid position to secure enough tenants to complete Lake Williams. The property is located at Forest and Williams streets, about 1.5 miles from a new interchange about to open to Interstate 495.
“It’s a nice site,” said Murphy. “The access is going to be right there.”
With the strong demand in the suburbs west of Boston, National and its silent money partner, Taurus Investments, have been able to avoid going spec at Lake Williams. The project’s first building, which opened last August, was a build-to-suit for Acosta/MAI. The corporate headquarters and sales facility totals 80,000 square feet on four floors.
More recently, the developers secured ATI to take an estimated 60,000 square feet in Lake Williams’ second building. The company, which will relocate from Mt. Royal Office Park in Marlborough, reportedly also has an option for the remaining 30,000 square feet that will encompass the entire building footprint.
After suffering mightily from the recession of the early 1990s, Marlborough has rebounded strongly in recent years. The city and surrounding communities have seen a host of technology firms opening and expanding in recent years, fueling the need for new space. Trammell Crow places the vacancy rate for the I-495/Central market at 5.5 percent, with just over 350,000 square feet currently available. The weighted average rent of $23.74 per square foot is well above that of rates being commanded in the I-495 North and South markets, with some achieved deals having reached the $30 per-square-foot plateau.
Trammell Crow principal Joseph Fallon said many tenants are turning to build-to-suits as an option in the tight marketplace. While there is at least 5 million square feet under construction, Fallon said much of that is already spoken for by companies who tied up the properties or are having them custom-built.
“I’ve never seen a market where supply and demand was so out of whack,” said Fallon. “The imbalance is incredible.”
Lake Williams is just the latest venture for National Development, which has constructed more than 7 million square feet of space in the Boston area over the years. The company is currently building out a massive office, hotel and retail complex in Woburn, for example, and earlier this month announced plans to develop nearly 190,000 square feet at the site of the former Blue Hills Nursery in Canton.
