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BEVERLY, MA-A sleek new office building has broken ground, helping to spread out a wave of speculative suburban construction along Route 128 that has previously been concentrated in Waltham some 25 miles south. The four-story, 65,000-sf 138 Conant St. is being built by Connolly Brothers, a multi-faceted construction and development firm headquartered next door at 152 Conant St. Project cost is estimated at $11 million.

“It’s a great site,” leasing broker Greg Klemmer of Klemmer Associates tells GlobeSt.com, citing attributes such as visibility and direct access to Route 128. Connolly also developed the adjacent 152 Conant St. on a speculative basis in 1989, a venture that proved successful when Electric Insurance took the entire 75,000 sf. After being there for nearly 15 years, Electric relocated to another building nearby developed on its behalf by Connolly, while 152 Conant St. was restocked as a multi-tenanted property.

Principal Stephen Connolly tells GlobeSt.com that he anticipates organic growth will lead the leasing of the newest building, although the North Shore has occasionally benefited by rising rental rates and tightening supply to the south. Connolly says he is not relying on such a trend, however, anticipating instead that the local business community has the demand necessary to fill the property. “The market has improved quite a bit,” he reports, while Klemmer says there is a particular dearth of first-class product in the region. Connolly Brothers had previously peddled the 2.7-acre site as a build-to-suit, but Klemmer says tenants tend to be reluctant to commit to a property that has not broken ground, leading to the speculative approach.

Having just kicked off the marketing program, Klemmer says the response has been immediate and gratifying. “It has already generated a bunch of calls,” he says. The space will be sub-dividable to 7,000 sf, with floor plates averaging 16,000 sf. According to a program last week sponsored by the Massachusetts chapters of Naiop and SIOR, the vast majority of suburban tenants seeking space have requirements under 20,000 sf. “It fits well” with market needs, Klemmer says of 138 Conant St.

Connolly Brothers designed the building in-house and is also doing the construction work. Besides visibility along Route 128, Connolly says he believes a level of structured parking under the office space will be attractive to tenants. A café and exercise facility are also in the plans.

Despite a harsh weather in the first few days of December, Connolly says the company is planning for an August completion, with the foundation already being installed and steel set for delivery in January. “Things are moving along well,” reports the developer. Presently, suburban Boston has about 1.2 million sf of speculative office construction underway, nearly 90% of which is in Waltham through the sponsorship of such firms as Boston Properties, Neelon Cos., Normandy Real Estate Partners and Davis Marcus Partners.

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