The 65-acre Reebok headquarters in Canton was hailed as a future model for custom-designed corporate workspaces when it opened in 2000. As Reebok moves to South Boston nearly two decades later, brokers are testing the demand for a large suburban office campus.
The sale of Reebok International’s sprawling campus in Canton is apparently drawing intense interest from investors.
But the question remains: When and for how much will it sell in an age when so many corporations – including Reebok itself – are moving their headquarters into downtown Boston to take advantage of the urban “live-work-play” amenities now demanded by so many young employees?
According to local commercial real estate sources, there’s no doubt the 65-acre Reebok campus, now owned by Reebok’s corporate parent, Adidas Group of Germany, is an attractive site. Tucked at the foot of the Blue Hills just south of the I-95 and I-93 interchange – and with Route 24 just to the east – the campus is conveniently located and only about 10 miles from Boston.
The campus, which Reebok started building out in the 1990s, includes a 518,000-square-foot main office building, a 138,000-square-foot office and R&D building, a 14,000-square-foot manor house and a 10,00-square foot child-care center. It also includes two parking garages, an indoor basketball court, seven outdoor playing fields and a literal indoor-outdoor track that runs briefly through the interior of a building before circling around outside.
For potential investors, the site is also attractive because it’s zoned for more buildings, if the demand ever arises. The site has another plus: It’s only had one tenant, Reebok, since it opened in the late 1990s, something investors value.
David Pergola, an executive vice president at CBRE New England, which was hired earlier this year to market the Reebok campus, said he was limited on what he could say about the sale process. But he did praise the Reebok site as one of the best suburban properties he’s ever seen.
“It’s beautiful,” said Pergola. “We’re right in the thick of things. “We’ve shown it to over 60 investors, institutions and companies.”
Pergola declined to say much more, citing the need for broker-client confidentiality.
Charlie Aspinwall, the town administrator in Canton, said he’s also hearing the Reebok campus is attracting considerable interest.
“They’re reporting the showings are quite active,” Aspinwall said.
Pushing Back Against Urbanization Trend
Still, despite all the interest, some commercial real estate sources wonder when – and for how much – the property might sell moving forward. The site was put on the block last May.
They note that a sale negative is that the current tenant, Reebok, is in the process of moving out, as Reebok shifts about 700 employees to its new headquarters in the Design Center in Boston’s Seaport District. The move-out is expected to be completed by the end of this year.
The other negative is the live-work-play trend of corporations preferring to be located in urban areas in order to attract and keep talent, a labor-force pressure Reebok obviously felt itself when it decided to move its headquarters to the Seaport District.
Another potential negative is the sale price of the campus, something Pergola declined to discuss. Some sources say Adidas is expecting $100 per foot and up for the property, a price target some say is too high for an office complex that will soon be empty.
But Frank Petz, head of the New England capital market group at JLL, said he thinks $100 and up is a reasonable price for a solid property.
Many institutions now view quality, well-located suburban properties as attractive investments because the Boston market has simply gotten so expensive, Petz said. The suburban office market has also improved quite a lot in recent years, especially in key areas along Route 128, and that makes the Reebok campus a “good product,” he said.
But that “good product” may have to be repositioned a bit. Sources say it’s likely, though not a foregone conclusion, that the Reebok campus may become a multitenant complex, a fact that makes it a harder sell to some investors. There’s also speculation that an educational institution might be interested in the site.
Canton’s Aspinwall said his town definitely wants the campus to be used for offices, not as a college campus or for other purposes by a nonprofit owner that might be exempt from paying local property taxes.
“We’ve related that this is what we want and that (the Reebok campus) is going to be kept on the tax rolls,” he said.
Both Aspinwall and Pergola expressed confidence that the Reebok property will be sold to a solid investor or corporation.
“Canton is a business friendly community,” said Aspinwall, ticking of the names of other major employers in Canton, including Dunkin’ Brands Group, Meditech, Organogenesis and Boston Mutual Life Insurance.
“A lot of people are looking at the site,” added Pergola.
