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CAMBRIDGE, MA-In one of Greater Boston’s heftiest office transactions of 2007, the Monitor Group has agreed to renew its full-building lease at 2 Canal Park, according to industry sources. The international consulting firm has reportedly signed on for another 10 years at the 195,000-sf building, which is located along the Charles River in the core East Cambridge business district.

Completed in 1999, the building is owned by Two Canal Park LLC, an affiliate of Boston-based TA Realty Associates, which is headed by principal Michael Ruane. The landlord declined comment, with official Beth Halverson telling GlobeSt.com, “We’re not ready to disclose any information about that deal yet.” The building’s exclusive leasing agent, Steve Purpura of Richards Barry Joyce & Partners, also would not discuss the matter. Monitor Group is being represented by FHO Partners principals John Boyle and Michael Brown, who were unavailable as of press deadline.

Despite the silence among those involved, sources say the pact has been signed. “The (lease) is done,” insists one industry professional tracking the extended negotiations. “They are staying put.” For a time, that result seemed in jeopardy after the company made it known that other locations were being considered, both in Cambridge and beyond. Suburban communities such as Lexington and Waltham have become increasingly popular for Cambridge companies facing rental increases, and that option is considered even more real given sudden tightness in the urban leasing landscape.

Besides the improving economy, a sizeable block of office space in Cambridge has been converted into laboratories during the past few years, a use that can reap a substantially higher rate. In its first quarter 2007 office market survey, Jones Lang LaSalle gives the core East Cambridge submarket a direct vacancy rate of just 6.9% and an availability rate of 11.2%. The lack of supply in the 12.0 million sf district has helped boost the average asking rental rate up to $35.86 per sf, well above the suburban average of $21.11 per sf, and supposedly enough of a difference to motivate companies with space needs to consider alternatives. “A lot of companies are at least willing to take a look now,” says one suburban broker. The source nonetheless acknowledges such a step can be challenging for an entrenched company such as Monitor, which reportedly employs close to 500 people, many reliant on public transportation.

Whatever the factors, it appears Monitor is not going anywhere for quite awhile. Corporately, the deal is also a victory for Cambridge given Monitor’s long-standing presence there, having first landed in the city in 1983 when the office market was in its infancy. Monitor committed to 2 Canal Park in 1998, even before its completion by New England Development, which also constructed the adjacent CambridgeSide Galleria mall.

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