Ferris Development Office Sale Tops $23M
CBRE BrokersTrade to Tenant Eversource
[VIA THE REAL REPORTER, WRITTEN BY JOE CLEMENTS]
WESTBOROUGH — Having just leased up a Waltham building amidst the region’s slogging office sector, Ferris Development Group has bucked 2023 malaise again via this week’s harvesting of 4 Technology Dr. in one of the region’s most challenged submarkets, Interstate 495 West, as anchor tenant Eversource Gas Co. acquires the first-class property at a consideration of $23.7 million through CBRE, the figure pushed from $21.3 million thanks to a land parcel accompanying the leafy eight-acre corporate campus FDG secured in spring 2015 for a mere $12.9 million.
In buying 4 Technology Dr. eight years ago, the hands-on firm led by founder David M. Ferris filled the two-story, 117,000-sf building implementing a vertically integrated restoration strategy used in other holdings such as its Waltham property—1432 Main St.—now at 100 percent occupancy as Real Reporter detailed last month. “We are excited to have some rather happy investors today,” Ferris tells Real Reporter regarding the Westborough purchase at $109 per sf eight years ago now fetching $197 per sf and yielding a strong capitalization rate of 7 percent, impressive for Interstate 495 office in the best of climates and even more laudatory up against a western flank beset by a torrent of tempests confounding landlords, the woes stark considering a resurgent 2010s when Route 128 firms seeking rent relief were streaming up the Massachusetts Turnpike until pandemic-induced live-streaming cratered the fortunes of office owners to disastrous levels and almost completely stopped investment sales paired with rising interest rates and inflation. “It is pretty wild to see an office building out there bringing a return like that right now,” one market watcher familiar with Ferris Development says in crediting a “secret formula” centered around tenant amenities, high-end finishes and tailored services engineered in its groundbreaking ownership of Westborough’s iconic One Research Dr., the imposing 285,000-sf facility FDG bought at a bargain-basement $21.5 million in winter 2014 and shortly thereafter landing Genzyme Corp. for 115,000 sf coming out of Framingham and inspiring a wave of other leases after its prior owner—saddled by a $55.5 million purchase price in 2005—opted to forsake the project in advance of FDG’s arrival and hands-on approach.
David Ferris
“It is really about the amenities and providing an environment people look forward to being in,” Ferris says of being able to keep assets viable by embracing the flight-toquality tendencies that are growing even more pronounced. Eversource has a bit more than half of the footprint at 4 Technology Dr.—roughly 60,000 sf—to go along with a quartet of other occupants, and the utility’s growth pattern made its purchase “a natural fit” when also considering new tax law changes favoring ownership of CRE. “It’s good real estate,” adds one CRE veteran who notes users often pay more than what an investor could compete against.
Offering kudos for FDG’s in-house contingent including Chief Operating Officer Brian R. Charville, Account Manager Michelle Lessard, Asset Manager Ryan O’Toole and Accounting Assistant Linda Swanepole, Ferris credits CBRE for providing in-depth guidance on both the leasing and eventual sales fronts, the latter featuring Vice Chairmen Michael Joyce and John Lashar, who negotiated the exchange with Eversource, Lashar a longtime fixture in guiding FDG back to the purchase and leaseup of One Research Dr.
“John is the consummate professional and a real friend,” Ferris says while also crediting Joyce and a deep background in tenant relations and also namesake cofounder of the Richards Barry Joyce & Partners shop that later merged with CBRE. “They all do excellent work,” Ferris says of his in-house talent and the CBRE advisors, with FDG also ably assisted by CBRE Vice President Danielle Simbliaris and Client Services Assistant Kendall Rowley. “It is a total, integrated effort,” Ferris says of continued accomplishments from the brokers and members of his firm that will celebrate its 15th anniversary in 2024.