Watermill Center Nears Full Occupancy

WALTHAM — Intercontinental Real Estate Corp. caught Waltham’s lat­est office market wave at just the right time when buying Watermill Center for $55.0 million in August 2014, and the surge of growth along Route 128 coupled with a strategic renova­tion of 800 South St. has carried the first-class building to the shores of 100 percent occu­pancy entering 2017. Newmark Grubb Knight Frank is exclusive leas­ing agent for the six-sto­ry, 209,450-sf property which has seen 33,575 sf of commitments since the landlord’s arrival, more than half of that landing in a recent spurt capturing three new tenants. “Since purchas­ing and upgrading Watermill Center, we have pulled tenants from Kendall Square (Cambridge), Wellesley and the Back Bay, reached 97 percent occupancy, and achieved rent growth of more than 20 percent,” Intercontinental asset manager  Scott R. Kelly reports in a release cele­brating the latest signings which bring two firms leaving the urban core and another moving a bit inward from 55 William St. in Wellesley, that being a UBS Financial Services offshoot known as The Harvest Group which is occupying 6,450 sf to house its six-person wealth management team. Another financial services entity, Great Elm Capital Group Inc., took down 8,350 sf into which it is relocating from 200 Clarendon St., known globally as Boston’s John Hancock Tower. And IPVision Inc. has leased 2,600 sf, with the patient tech­nology consulting group leaving 139 Main St. in Cambridge’s Ken­dall Square. Just what motivations prompt­ed the companies to eschew their existing camps is not revealed, but all three are in prop­erties ranked among the most expensive in their own weight class­es, including Wellesley Office Park where 55 William St. is situated, a multi-building complex where rents are known to command over $40 per sf. The bigger take-away from market watchers regarding In­tercontinental’s progress at 800 South St. is in the landlord’s approach of making the property that was 30 years old upon pur­chase into a new millennium alternative, ostensibly anticipating companies leaving a best-in-class climate will still be seek­ing top-flight amenities even at a cheaper rental consideration. Besides updating its two-story lobby and creating “dynamic” indoor and out­door common areas, Intercontinental offers Watermill Center tenants a state­ly conference room, modernized fitness center and renovated cafe. There is also covered parking and on-site property management for the park which is located on a seven-acre campus overlooking the Charles River and Stony Brook Reservoir. The Newmark leasing team advising In­tercontinental features Executive Manag­ing Director Mark Roth, Managing Direc­tors Brendan Daly and Matt Malatesta and Associate Blake McLaughlin. In the press release, Roth relays there is an added ad­vantage to Watermill Center besides the serene setting and access to nearby dining and retail options, with 800 South St. es­pecially close to the confluence of Route 128/I-95 and the Massachusetts Turnpike. “In a full employment economy with busy roads, tenants are placing a higher value on the ease of access to their work places,” explains the suburban market veteran. Newmark research through Q4 2016 shows the submarket of 20.0 million sf did register another season of positive net ab­sorption to the rate of 153,000 sf, the bulk of it occurring in the final frame which helped push the vacancy rate down to 11.1 percent. The submarket’s asking rent is now averaging $34.66 per sf overall and $37.93 per sf for first class space. Led by CEO Peter Palandjian, Inter­continental is a Brighton-based SEC-Reg­istered Investment Advisor today manag­ing a real estate portfolio valued at nearly $6 billion, its funds diversified in geogra­phy and property mix. Watermill Center is owned by its U.S. REIF Watermill Center Massachusetts LLC.

 

-The Real Reporter