"It's a quality building," says CB Richard Ellis principal MarkReardon, who represented the landlord in lease negotiations alongwith colleague David Corkery. CBRE's Robert Gibson and Ed Jaroszacted on behalf of the McNichols Co., a steel service center thathas a national platform, with 17 similar operations and 26 fieldmanagers coast to coast. McNichols Co. SVP Larry Jones praised theoutcome of the Billerica deal and the real estate team for findingthe property in an area that Reardon says is becoming increasinglypopular.

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"We've done a lot of deals in that market over the last year,and it seems like the momentum is carrying over," says Reardon."We've got a lot going on right now." Billerica helped secure670,000 sf of net positive absorption for the region in 2007,according to Grubb & Ellis in its industrial market overview.Much of that velocity occurred at 90 Salem Rd. in North Billericawhere a former Kmart warehouse being repositioned by ING Clarionscored a 171,000 sf tenant early in the year and FedEx's leasing of145,000 sf to close out 2007 on an up note for the 628,000-sfbehemoth.

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Reardon, whose team is leasing agent for 90 Salem Rd., notesthat industrial and manufacturing uses are not new to the metronorth suburban region, although he notes there is restrictedsupply, with most sites along Route 3 having been grabbed for flexand office development, at a time when transportation costs arespurring companies to be nearer their customer, as in the case ofSiegel Egg Co. moving to 90 Salem Rd. in early 2007. "That wholeindustrial market is tightening up considerably," says Reardon,adding that the widening of Route 3 is seen as another benefit forindustrial users, similar to the response among other tenant thatgave Route 3 one of its best years ever for commercial leasingactivity.

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According to CBRE, the Route 3 corridor from Burlington to NewHampshire has just 9.9 million sf of industrial product. There is arelatively high vacancy rate of 19.1%, but much of that isconsidered obsolete, most likely to be demolished for flex andoffice space. In its year-end review, CBRE says there is no majorindustrial construction on the horizon in the larger metro northsubmarket that includes Route 3 North. The 51.2 million sf metronorth submarket has a 17.1% vacancy rate, according to CBRE.

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