Lee Partners of New England

We were recently contacted by an interesting firm. Helpmovingoffice.com are an up-and-coming firm based in the UK who help tenants with all aspects of moving their office. If you are considering making a move, for any reason, you should check out their website. You will be able to download some very useful checklists outlining all the issues you might face. The can refer you to the variety of vendors who can assist you in a move, including:

• Movers
• Designers
• IT consultants
• Tenant representation
• and Legal support

Other guidance, as checklist templates, help you map out the budget and timeline of your planned move. There’s also a “7 Deadly Sins of Relocating” that you can download. To get the checklists, you do need to enter your contact information (nothing valuable is really for free) and you may be contacted by some representatives of the vendors, who are ready to help you.

The site is a good way to link space users, who are needing solutions and guidance in moving, to professionals who can help that process be more efficient, productive, and valuable for the tenant organization. www.helpmovingoffice.com – check ‘em out!

It was a dark and stormy…day, in Boston’s Seaport District. Also known as the Innovation District.

You can see the hulking roof of the Boston Convention Center on theleft, the towers of International Place and theFederal Reserve on the right. The foreboding figure in the center is an exhaust structure from the Ted Williams Tunnel. And surrounding, the many parking lots. All this will be re-developed in the coming years. More to be seen to the right of the photo – the Fallon Company’s Seaport Square project. More on that in another post.

Real Estate BisNow put together a great show about apartment complexes this morning. Many players in the multifamily development industry came together. There were two panels: one on developers and one on owners. Developers included WinnDevelopment’s Larry Curtis who mentioned how they build the $2/sf/mo rental for regular people, not the $4/sf/mo like Avalon Bay and Equity Residential (both represented). Simon Butler of CBRE noted it costs $400/sf to build institutional (pension fund and REIT) quality apartment complexes, and that is getting hard to do in the Boston area. The speakers agreed that the constrained development market is good but the extremely low cap rates, 4% these days, are too low to handle long-term management/cap improvement needs. Some projects are going to be built as inventory for other owners in the future, said Larry Curtis.

The Owner panel included Bobby Zucker of Chestnut Hill Realty, Bill McLaughlin of Avalon Bay, Bruce Percelay of the Mount Vernon Company and the legendary Harold Brown at the Hamilton Companies. Home ownership is at a 66% rate now, over the historical 64%, and Bill McLaughlin believes that will decrease and decrease. Millennials want urban living, and many people are realizing renting is not bad – plenty in Europe do this for generations. Harold Brown wanted everyone to be careful – three years ago he said it was time to invest in multifamily, and now it’s getting pretty hot if you’re not already there. As the business cycle comes back, cap rates will increase, and developers will lose buildings. Bruce Percelay noted that Boston is a hot market benefiting from wholesale cheap money, a raging bull market in a sluggish national economy that keeps the rates low. Bobby Zucker mentioned that because there are so many demand drivers, it is still a good market to put money into, those drivers aren’t going away soon. He also mentioned there are a lot of technical improvements in property management and leasing that improve his organization’s profitability.

Bruce Percelay described how the new product they are putting onto the market is superior to so much of the stock in Boston – you just can’t improve a lot of old buildings to today’s demand. Harold Brown mentioned they don’t use “OPM” – Other People’s Money – so they have more room to be creative, but cautiously. When Bruce suggested his projects will have unique features tenants want, Harold quipped “views?” and Bruce quickly responded: “Ours will actually have windows” – to which the crowd had a tremendous chuckle considering the reputation the Hamilton Co. has for low-grade apartments. “Well said” retorted the still-quick at 84 Brown.

All in all it was a great meeting, and I learned a lot. I caught a few people to talk about green leasing and some were interested, some still trying to resist, claiming it costs more. I explained the benefits outweigh the costs if you look at the whole picture of aligning your space with your brand, if you’re trying to attract and retain the best talent, and if you are serious about saving operating costs. I made some good connections and had my daily portion of fruit from the buffet! I’ll keep you posted about my next excursion into Boston’s Real Estate world with BisNow. Let me know if you plan to attend one and we can meet up!

The first week of the New Year started off with three separate space planning sessions – all for different suites of office space. A critical component in the leasing process is to conceptualize and then to finalize the office space requirements – such as how many offices, conference rooms, open cubicle areas, storage space, kitchenette considerations, server room size and needs for special HVAC, reception area, specialty rooms, adjacencies for operations, and other critical unique needs.

This process is helped tremendously by having a space planner and / or architect assist in this effort. A “first pass” interview and “bubble plan” is usually part of the process. After this plan is reviewed and refined a second version is circulated to the interested tenant senior management for further refinement and edits.

Once a final plan is agreed upon it can be submitted by the Landlord to a general contractor for pricing. Upon receipt of contractor pricing the Landlord can calculate a lease rate that can make the numbers work for a lease – including any concessions that may be needed to “make the deal.”

You can see how important the space planning process step is in the leasing process – and starting off the year with three planning sessions with both Landlord and Tenant bodes well for increased leasing activity at the start of 2012.

Usually it is pretty quiet the last week of the year – but not 2011!

We had a terrific meeting on Tuesday to review a build-to-suit site in along Rt. 128. Here we are working  with a national franchise operator and a local future franchisee that needs about one acre to meet their new building requirement. We met with a colleague of ours with whom we have previously worked on construction projects for Eastman Kodak (90,000 sq ft) at the former Wang Towers in Lowell, Eastman Software (107,000 sq ft) on Concord Road in Billerica, and PhotonEx (150,000 sq ft.) in Maynard, MA. They are a pro outfit and this meeting could lead to another build-to-suit project.

We are negotiating daily with a tenant considering office space at 1087 Beacon Street in Newton – and this one has an unusual twist – where the tenant will be building out the entire suite – in return for a somewhat lower than market lease rate. This potential transaction will benefit both parties in that the tenant will be able to control the construction process and the Landlord will be relieved of the responsibility to build-out the space. A meeting of the minds could result in a very long term lease commitment to the office space.

In other activity, a co-operating broker – PointLine, Inc. – out of Tampa Florida continues to work with us on one of their national clients – PSS – in S.E. Massachusetts. Another co-operating broker – Hunt Corporate Services is finishing up a lease deal with their client PNC Mortgage in Burlington. In both of these instances we are utilizing our national contacts to facilitate and support lease transactions in the Boston market area. Up in New Hampshire we continue to work this week with one of the most professional brokers in the business – Mike Monks of Monks, Inc. He is helping us locate and secure space for our long term client in Canton, MA. Our client is reviewing space plans, HVAC and electrical
specs, and maps at a site review meeting later today for a R&D and office leasing  requirement in the Hudson-Nashua market area.

Interest is also picking up at 209 Burlington Road, in Bedford. This is one of our long term listing commitments (sold building in the early 1990’s). A new tenant prospect is looking to lease up to 5,000 sq ft. of office space, and they have requested a floor plan design, incorporating their requirement into a new buildout office space layout.

We will be working on this with the Landlord’s support team over the next few days. In addition, a small CPA firm is confirmed for a tour of office space at this building for later today – as strong end of year leasing activity for our projects continues!

On Dec 20th, about 20 people participated in a tour of the Castle Square Deep Energy Retrofit project. Assembled by LISC (Local Initative Support Corporation)-Boston Program Officer, Elizabeth Glynn, the group came from a number of different housing agencies/organizations around eastern Massachusetts. Grey Lee, Sustainability Coordinator at Castle Square, co-facilitated the tour with Bruce Hampton (Elton+Hampton Architects), the lead architect on the project, and Tom O’Neil, from Pinck & Co, the CSTO (owner)’s rep in the construction project. Melissa Martinez from Pinck & Co also helped guide us and answer questions about the project. It was a great team of presenters and very cool to get access to “behind the scenes.” Below is Bruce and Tom explaining the energy savings – comparing the energy profile of “before” with “after” and describing all the different places (the segments on the bar chart) where energy savings came from. There was no silver bullet – the savings came from an integrated process coordinating technologies to provide incremental savings, adding up to the modeled 70% – amazing – savings.

We filed through one of the “hospitality suites” – one of the  units in the mid-rise (the buildings along Tremont Street) to see what it was like for the tenants. These suites are available for any resident to spend time in when any construction needs to happen in their unit, and they have nowhere else to spend the day. The tour participants were impressed by the quality of the general upgrade – the kitchens and bathrooms, the windows and various doors. The picture is looking onto the roof over the commercial space that CSTO rents out to small businesses along Tremont St. The workers are putting a hole through an insulation panel for the direct outside air intake vent – these enable a temperature-restricted flow of fresh air into the apartment while the ventilation system is gently pulling waste air out of each unit.

The group wanted to see what this big retrofit project was all about. Below is a picture of Tom O’Neil describing the three new natural gas furnaces in the rooftop mechanical room. Where everyone is standing was once a giant old oil-fired boiler. The white wall at the rear of the photo was open, through louvers, to the air. In winter, intake air was ambient temperature. Now, with the heat recovery system, building exhaust air from all the interior space passes through a heat exchanger (not seen here) on its way out, pre-heating the intake air for the system and enabling it to use less energy to bring everything up to the distribution temperature. Much more efficient. The red tank on the right is an expansion chamber for the solar-powered domestic hot water system, its storage tanks are larger out of frame to the right.

These three natural gas furnaces replaced a machine the size of a van in this room.

From the top, looking northwest, the towers of Boston’s Back Bay…Castle Square is in the heart of the city.

The tour group at the top of 484 Tremont St, CWC Construction workers getting the final exterior insulation panels fitted to the top of the mechanical house on the roof. In the foreground is a helmeted exhaust vent, part of the heat recovery system – the air coming out of the building, pulled by the fans of this unit, is heating intake air, thus it is cooler than directly vented interior waste air.

Here’s what we were looking at: The fabulous solar hot water arrays.

This is a shot looking up at the underside of the solar hot water system. I should have rotated it but either way, you can see the plumbing. 20% of the hot water will be heated through these panels. Maybe we can work on another grant to get more of these things upstairs!

These are Green Buildings, so come on down! (This is the entrance to LEED EB Gold “One Boston Place” at 201 Washington St, Boston)…you may have noticed a few marquee properties “going green” in Boston. Well, it’s the right thing to do, high end tenant clients expect it, and if you don’t transition your old building with a serious green operating plan (like LEED EB) you are going to be missing the market in the future.

From Rick Fedrizzi, president of the US Green Building Council: “As of this month, cumulative square footage of LEED-certified existing buildings surpassed LEED-certified new construction for the first time. As the U.S. is home to more than 60 billion square feet of existing commercial buildings, most of which are energy guzzlers and water sieves, this trend serves as a promising indicator of our progress.”

This is a the continuation of a logical process to make buildings better, and is understandable considering the size of the existing building stock in the country. Heidi Schwartz at Today’s Facility Manager has a great post about the success of LEED-EB. Here’s another green building I’ve been to a few times recently: the Federal Reserve Building of Boston (Bostong Globe pic)

It was another busy week for Lee Partners. We scheduled and participated in a second New Hampshire tour of “flex” manufacturing and office space for a defense contractor currently located in Southern New Hampshire with a second office in South East Massachusetts. The CEO indicated that the company needs to expand and consolidate the two offices plus a third company office – to be acquired – into a new facility in the Nashua market area of New Hampshire.

Part of the requirement is to build out some specialty manufacturing rooms and also have direct access to a shipping area loading dock. Above standard HVAC and power is part of the requirement. We toured alternatives in Nashua and Hudson – with additional sites to be investigated
in the next two weeks before the end of the year. For this project we have teamed up with a very professional New Hampshire commercial real estate broker – Mike Monks. Mike’s knowledge of the southern New Hampshire commercial market is without parallel. It is a real pleasure to be working with Mike on this assignment. We will be able to report more on this effort over the next many months.

We ended the week with another client visit/tour of a site near the Needham – Dedham boundary line off of Rt 128. The location will be part of a newly permitted medical campus within the town of Dedham. This is a very exciting project that has significant large institutional interest within the expansion plans of Boston hospitals and medical institutions. The tour started with a meeting with the developer’s office and then proceeded to the site. In this case our developer/owner is a very experienced general contractor familiar with the organization’s needs. I have high hopes for this build to suit opportunity – although it will also require many months and possibly a year or two to obtain all approvals to build a new facility. This time-frame is not unusual for commercial real estate projects in Eastern Massachusetts that require build-to-suit buildings. One retail site I worked on in the town of Westford, MA took over eight years to market/sell and re-develop into a McDonald’s outlet – from its original listing for sale. Let’s hope this potential build-to-suit will not take that long – for the sake of all parties!

Check this out: this office has space for only 60-70% of the firm’s employees. Fast Company Exist – their channel devoted to tech innovation – recently reported on an office of the future. Plantronics is based in europe and their new office in Santa Cruz is designed for employees to work from elsewhere.“There’s an expectation that you can work anywhere and be highly productive and engaged,” says Patricia Wadors, HR SVP at Plantronics. The office has flatscreens everywhere so people can skype in to conferences. Young professionals are totally accustomed to ubiquitous, mobile connectivity. The rest of use are going to have to get up to speed.This is the way of the future. How will CRE respond, how will owners secure the value of their property as organizations continue to require less physical space per unit of their productivity? The evolution of offices and work continues!

A Tour this week with an organization looking to re-locate from the Suburban market into Cambridge included a visit to two buildings being redeveloped by Equity Office in Cambridge. Both 125 and 150 Cambridge Park Drive, Cambridge, MA are going under extensive renovations to include new lobby areas and an exciting new amenity complex within the first floor of 150 Cambridge Street.

Equity is going all out to upgrade these buildings and it showed. Both are located a short walk from the Alewife “T” station and they both have ample free parking available for new tenants. In three short months these neglected class A office buildings with an outstanding location have been re-vitalized.

In addition to the new lobby areas, the amenity center will include an expanded Fitness Center and Yoga Studio, a Conference Center, Game Room, Genius Bar, Inside Bike Storage, Outside Fire Pit & Bocce Court with viewing areas, and an exciting new – first in the nation Whole Foods Café – that will even have take-out dinners for those in a hurry to get home without time to cook dinner!

150 Cambridge Park Drive is being offered to larger tenants with full floors available and 125 Cambridge Park Drive is available for smaller tenants. The Park buildings have on-site security at all times and a Tenant Coordinator to help smooth out any building operational issues.
Equity is even building out new office space on speculation to meet the needs of prospective tenants that must occupy very quickly. Even with all of these upgrades and new amenities the space is being offered at net-effective lease rates competitive with surrounding buildings. This two-building office offering is now positioned to be a quality cost effective offering within the Cambridge market. It may even fit the needs of the group that visited the site with me this week.

I was invited to the New England Regional Smart Growth Conference last week – hosted by the Lincoln Institute at the Federal Reserve of Boston. I follow the Institute because I’ve always been a land planning geek. Your twitterers can follow them at (@landpolicy). The conf is a great way to get together with a few people (a couple hundred this year) who work on various issues related to urban growth in New England. They always have great presentations as well. I met a woman who runs stormwater programs for the state of Connecticut, a programmer at ICLEI (USA) – the international org born in Rio’92, charged with supporting the implementation of Agenda 21 – which is a checklist for communities to use to approach a sustainable future. I ran into a cooperative colleague, Orion Kriegman, who is based at the Institute for Policy Studies, but is working on “Pueblo Boston” a creative urban land trust / cooperative concept in Eggleston Square JP/Roxbury. Always good to network with planning types.Armando Carbonell, of the Lincoln Institute, led off with a great tour of work they are doing -  in regional planning, high-speed rail, and land tax policy. He looked at nature in cities, and cities in nature. He commented that the future of human populations is in cities – and cities that are becoming less and less dense than ever before, and what the implications of this will be… I was reminded of reading about America’s Megaregions when I ploughed through the Plan of Nashville last summer – a great document of helping focus growth in a great city. Philip Langdon at the New Urban Network wrote a good write-up and described the issues with the federal de-funding of the Sustainable Community Initiatives program.

Another excellent presenter was Lyle Wray from Hartford CT (though his name and accent places his provenance further south) who is working on enhancing the presence of the Knowledge Corridor – which I would call the Connecticut River Valley or Pioneer Valley – basically Hartford to Greenfield MA. There are 1.9M in the region and it is basically in the top 20 regions, population-wise, of the country, but spread out across Hartford, Springfield/Holyoke, and Amherst/Northampton. Lyle’s big statement was that we planners, if we all take a Myers-Briggs test, will notice that we all enjoy thinking about things systemically and in holistic ways. But 95% of the population does not like to think this way. We have to figure out how to present the solutions we advocate in ways that use the non-systems language of the majority of the population. Food for thought.

The best presentation of the day was from the keynote speaker, Ron Sims - former Deputy Secretary for HUD and former King County (Seattle Washington) Executive. “Sustainability is the way of the future. If you are conservative, you will believe in sustainability” “It is using money smartly and conservatively” “Poor planning is a signal to your business community that you are going to treat them as the ATM for public projects.” “Density improves communities: people living together tightly forces them to figure it out, figure it out how to live well with one another. We all need to do this.” And he urged us to share prosperity across all segments of our communities – it’s not enough to just let some people live in the poor part of town. We need “all hands on deck” to innovate, and solve problems, if we are going to survive. “We can’t compete with China and India based just on the bell curve” and we’ll need everyone’s contribution. He brought up his story about climbing Mt. Ranier – in a rope team – you can only go as fast and as far as the slowest and weakest on the rope team. We are all in it together.

It was a great talk, but not just about planning. Ron talked about motivation. Why go to work in the morning if it is going to be easy? He also talked about managment. He wanted people to take risks. If you take a risk, and you win, I will sing your praises. If you take a risk and fail, I will help you get better. If you do not take any risks while you are working for me, I will make it very hard for you to work here. Chuckles ensued from the crowd. I enjoyed his exhortation to embrace the cause. Sustainability is wonderful because it is not just a practice, or a discipline, it is a cause that we can commit our passion to. It is a community. We are lucky to be doing this work. And I totally agree with him.