Suburban Flex/Industrial Package Fetches $16M

(Read more on the industrial market.)

FRANKLIN, MA-Five years after the Grove Street Business Center broke ground here, two buildings at the flex/industrial park are changing hands, as a joint venture has purchased 157 and 165 Grove St. from the Maggiore Cos. Woburn-based Maggiore reaped $15.8 million for the two fully leased buildings, which total just under 167,000 sf.

“In my mind, this is the best one-story flex product along Interstate 495, and the price reflects it,” says New Dover Associates president Scott Hughes, the sole broker in the transaction. Hughes has represented Maggiore since construction began on the 23-acre parcel on a speculative basis in spring 2002. A third building at the 221,000-sf park, 161 Grove St., was not included in the sale to Hall Royce Grove St. LLC, an entity led by local investors Denison Hall and Adam Berger, and their joint venture partners, Guggenheim Real Estate LLC.

Hughes explains that Maggiore founder Paul Maggiore has created a CRE niche throughout suburban Boston, product targeting small- to mid-sized users needing multi-functional space that can be configured to meet the company’s needs over time. The Grove Street Business Center offers 18-foot clear height and bays that run 200 feet deep. The buildings can be leased in increments as small as 7,000 sf, although many Grove Street Business Center tenants have absorbed multiple bays. Heavy landscaping and high-level materials for its ilk have enhanced the park’s desirability, says Hughes, noting the presence of several national companies on the tenant roster. Along with such names as Circuit City, Gutter Max and Rent-A-Center, electrical giant Cutler-Hammer has a sales office at 165 Grove St., one that includes a heavy fit out of office space. That investment reflects the quality, according to Hughes, who estimates that the normal office build out at Grove Street Business Center is 10% to 20% of the leased space.

Having moved south from I-495 to make his initial foray into Franklin with the Grove Street Business Center, Paul Maggiore tells GlobeSt.com that the gamble has “exceeded expectations” five years later. “It was a home run,” he says of the project, citing a lack of competing space in a market dominated by big-box warehouses featuring 30-foot clear heights. Maggiore also credits a business-friendly attitude in Franklin and the central location on I-495 for assisting the venture’s successful completion. Maggiore is now turning his sights on other opportunities in the town, as well as in nearby communities such as Taunton, another high-bay haven where he hopes to meet alternative demand needs.

Hughes maintains Maggiore’s approach will travel well. “It’s a very successful formula,” he says. Despite the lofty pricing, Hughes further predicts the new owners will reap rewards from the improving market conditions and physical mettle of the buildings, which as in all Maggiore Cos. projects, were designed and constructed in-house. “Paul builds the most attractive but functional properties you’ll find in the industry,” Hughes says, adding, “there’s a lot of upside [at Grove Street] over time.”