Friday, August 17, 2007

Union Products yesterday...Union Square tomorrow

In case you weren't aware, Union Products has gone out of business and no longer manufactures the pink flamingos that nobody would ever put on their front lawn today. The funny thing is that once the plant closed down everybody got all sentimental and it was like the worst day ever in flamingo land.

After the plant closing, The Flamingo Project was born to bring back to life something that I can't recall ever seeing anywhere in Leominster on a front lawn.

Now certainly there is more to the Flamingo Project than making flamingos, don't get me wrong. I think those guys are going to do great things for the community around recycling and possibly redevelopment and reuse of some of the areas vacant industrial buildings. Will they make money selling flamingos? We'll see...

I just can't see pink flamingos on the front lawns of the houses being built in some of Leominster's upscale developments. I think I read about a covenant in one development that no flamingos were allowed in the front lawns of any houses. forward to August 6, 2007. Jimmy Xarras closed on the Union Products building after being the high bidder at a foreclosure auction held back in June. He took title in the name of Union Square Realty Trust. That's pretty catchy. There's a Union Square in downtown San Francisco and it's a happening place.

What are Jimmy's plans for the nearly 200,000 SF complex? Who knows...only Jimmy knows that. I think a great idea would be a small village of commercial/retail and office buildings with a mix of small industrial buildings that could either be leased or purchased.

I envision a small mixed use development. He could call it Union Square. Do you think he already had that thought?

We'll see what happens over there but I'm sure he didn't buy it so it could sit in the state it's in now so expect to see some action over there.

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Wednesday, August 8, 2007

Massachusetts Site Finder Service reaching out to the Bio-Tech community

Is Massachusetts in a position to play host to any of a number of Bio-Tech firms looking at this state as a potential place to call home? They sure are trying according to a recent article in the Boston Business Journal.

Launched last year, the Massachusetts Site Finder Service recently added 92 Bio-Tech ready properties to its list of available sites. That's a small percentage of the nearly 1,700 sites in their database but it shows that state officials are looking to compete with states like California when it comes to attracting the "Tech companies".

The site finder service is a comprehensive database of available properties throughout Massachusetts with contact information of owners and listing brokers, photographs, building specs, and links to finance agencies, community websites, and several other features.

I spent about an hour on the site recently and found it to be very well designed and easy to use so hopefully we can start to see some of the big Bio-Tech players coming our way. In case you haven't heard, Bristol-Myers Squibb recently broke ground on a new facility in Devens, MA and they'll be dropping about $750M on their new "Biologics Manufacturing Facility"

There is another big user out there with their feelers out and hopefully they'll follow in BMS footsteps and set up shop here in the Commonwealth. "Project Ajax" represents a manufacturer looking for 75 acres to build a 920,000 SF facility.

If you represent a company looking to locate in Massachusetts or you have a company and you're looking to locate in Massachusetts, this is a great place to start. If you haven't already, your first step is to hire a Buyer's Agent. The Site Finder website will give you and your agent a wealth of information on available real estate in Mass. A phone call to the Mass Alliance of Economic Development, or MAED, will put you in touch with one of a number of representatives whose job it is to make your move here to Massachusetts smooth and seamless...

Now if we can just get Deval Patrick to adopt a statewide uniform permitting process so these companies don't have to spend 6 months to a year jumping through hoops and navigating their way through a web of red tape...but that's a post for another day.

Tuesday, August 7, 2007

Commercial Leases - 2 Things You Should Know about "Common Area"

Vicki Watzlawick of Exit Platinum Realty asked me to do more posts about commercial real estate terms so hopefully you find this informative Vicky...

Thanks for the suggestion.

Negotiating a lease for commercial real estate is something that is done by real estate professionals all over the country every day for their clients. As a business owner, you want to make sure it's done right the first time. One thing you need to understand is the Common Area of a building and expenses associated with it.

The Common Area of a building is calculated by adding up the square footage of lobbies, stairwells, shared bathrooms and other sections of the building that are used by all tenants "in common".

Below are 2 terms you want to understand that relate to the Common Area of a building.

CAM Charges - CAM stands for Common Area Maintenance. These charges include expenses such as snow removal, landscaping, and general building maintenance as it applies to the Common Areas of the building. These expenses are usually divided among all tenants in the building based on each tenant's square footage. If each tenant has 1,000 SF of a 10,000 SF building, each tenant would be responsible for paying 10% of the Common Area charges. You want to make sure that the lease rate that a landlord quotes either specifically includes or excludes these charges.

You may see a rate quoted as $15/SF but further down in the body of the lease there could be a reference to CAM charges that equal another $3/SF. This additional charge just bumped your rent up 20%. These types of charges are common in industrial properties and some newer retail properties but not as common in office properties. You would typically have these charges built into an office lease.

Common Area Factor - Often times a lease will reference leaseable area of a space not the usable area. Let's take a 100,000 SF office building as an example. Of the 100,000 SF, there is a huge lobby on the first floor and small lobbies on each of the 4 upper levels. This lobby area totals 10,000 SF or 10% of the total building's square footage. Technically the building only has 90,000 SF of "usable area" available to the tenant but the landlord wants to make sure he is making money on all 100,000 SF. After all, somebody has to pay for the cleaning and upkeep of the common areas and the landlord doesn't want to do it.

How this is addressed is that the landlord applies a "Common Area Factor" of 10% to each office suite in the building. If a tenant is looking at leasing 1,000 SF, the tenant will actually have to pay for 1,100 SF. The idea is that if the landlord gets an extra 10% from each tenant in the building, he covers the entire 10,000 SF lobby area. You want to make sure that the landlord explains how he calculates leasable area.

The "common area factor" I used above in the example can vary greatly from one property to another and this is an important point to consider when comparing properties. One building may use a common area factor of 10% which means that if you are looking to lease 1,000 SF you are going to pay for 1,100 SF and another building may have a lot of lobby space and other common area and for the same 1,000 SF requirement, you may end up paying for 1,200 SF because the building has a 20% common area factor. Ideally, and often times in new construction, buildings are being designed with little or now common area which means that if you are looking to rent 1,000 SF you are going to pay for 1,000 SF.

Do you have more questions about commercial real estate terminology? Check out these posts for more important terms to know...

What's A Vanilla Box Anyways?

Commercial Real Estate Terminology - What does this stuff mean???

Leominster Commercial Real Estate - Office Space For Lease - Part 3

This is the third of a four part series on the Leominster commercial real estate market. This series focuses on Leominster office space for lease. I'll be focusing on Routes 12 & 117 as well as some of the smaller properties in the area that are great options for startups and small businesses looking for more affordable rent.

Heading into Leominster from I-190 you would likely take Route 117 also knows as Lancaster St. Just a couple miles in from the highway, the first option you'll come across for office space in Leominster is the Gateway Business Center. This property is a converted mill building owned and managed by Steve Boucher, a local investor/developer.

Gateway offers three levels of space with office rents starting at $9/SF triple net. Steve has done a tremendous job preparing the upper levels of the building for occupancy by small businesses.

The floors and beams have been sandblasted, windows replaced, and the HVAC system is being completely upgraded to meet the current standards for energy efficiency.

Some of the other amenities include an on-site state of the art fitness center, and an electronic 24-hour security system that only allows for after hours entry with an electronic key card. All entrances are locked at the end of the day automatically and the property is opened each morning. The building is also fully ADA compliant with the recent addition of a full-service elevator.

As you head closer to the downtown, you'll pass by the #3 Fire Station, yes a former fire station that was recently purchased by a couple of local investors and renovated. The property is located at 145 Lancaster St, directly across from the Hannaford Plaza. The first floor was recently leased to Leominster Auto Parts with the second floor slated for renovations to accomodate an office tenant. The space is available for lease for $9/SF and the current owners will accomodate the right tenant with elevator access. Naturally the lease rate increases should you desire elevator access but it's an option.

The Route 12 Corridor running from Sterling to downtown Leominster is where you would find the Leominster Plaza. This property is a mixed use property with the first floor being a strip mall type setting with tenants ranging from a sandwich shop, a laundromat, a night club, a staffing company, and several others.

The second floor, with ground level access, reached by driving around to the rear of the property and up the driveway, is home to more traditional office users such as financial planners, a chiropractor, real estate company, I/T companies, and several others. Office lease rates here are in the $15/SF range but the owner is always willing to negotiate. An on-site manager is there to make sure your service requests are handled promptly. The offices are clean and neat with upscale finishes at an affordable price.

Closer to the downtown are several small buildings formerly used as multi-family homes that have been converted over the years to accomodate small businesses. These properties offer some of the most affordable rents in the city but lack a lot of the amenities such as elevator access for ADA compliance, executive finishes, and off-street parking. If you're just starting out in business and a single office is all you need and you don't mind climbing stairs, you can get a great deal just outside of downtown Leominster in a number of small office properties.

In the last installment of this series, I'll spotlight Crossroads Office Park and also sum up the previous three installments.

As always, if you're considering leasing office space in Leominster, I reccomend you always make sure you have proper representation by a licensed real estate professional.

See Also: Leominster Commercial Real Estate - Office Space For Lease - Part 1

Leominster Commercial Real Estate - Office Space For Lease - Part 2