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DEDHAM, MA-The Route 128 South office market stumbled in 2007, but a full-building lease here is offering a measure of first quarter velocity for local landlords. Island Oasis will occupy just under 35,000 sf at 40 Allied Dr., a two-story structure owned by Murphy & McManus.

A company involved in the beverage industry, Island Oasis will relocate from Walpole in the spring or early summer, says Cushman & Wakefield senior director J.P. Plunkett, who represented the tenant along with C&W senior director Catherine Minnerly and associate Jason Bryer. CB Richard Ellis principal Steve Murphy and first vice principal David Corkery negotiated terms for the landlord.

Route 128 South was the only portion of the famous business loop to post negative net absorption in 2007, according to year-end figures compiled by C&W that registered the submarket 149,000 sf in the red. That compares to 663,000 sf positive net absorption for Route 128 North and 735,000 sf in the core Route 128 Central submarket. Route 128 South and Interstate 495 South, minus 442,000 sf, were the only submarkets among seven tracked by C&W to record negative absorption for the year, with the suburbs overall posting a gain of 1.9 million sf.

Terms of the Island Oasis lease were not revealed, but Murphy says the average rent for the submarket is in the $22-per-sf range. The veteran broker also tells GlobeSt.com that he is encouraged by the direction Route 128 South is heading. “It has been pretty stable,” says Murphy, whose company’s research has the submarket in the positive on net absorption in 2007. The differences reflect incongruent samplings, with CBRE defining Route 128 South as a 14-million-sf office market versus 11.7 million sf for C&W. Murphy says even a slight dip into negative absorption does not indicate an imbalanced submarket, especially for a limited inventory. The vacancy rate has remained relatively solid, he adds, with CBRE putting the figure at around 13%, in line with the 13.7% posted by C&W.

Murphy & McManus is a Needham-based company active in the life sciences sector and also a specialist at assisting nonprofit organizations in their real estate needs. The firm has owned 40 Allied Dr. since buying it for $4.1 million in November 2005.

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