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BILLERICA, MA-A full-building industrial pact here is demonstrating that the Route 3 North corridor is not just busy for flex and office leasing, as the McNichols Co. takes all of 33 High St. The single-story, 37,000-sf structure was constructed in 2006. It is owned by Sabre Management LLC.

“It’s a quality building,” says CB Richard Ellis principal Mark Reardon, who represented the landlord in lease negotiations along with colleague David Corkery. CBRE’s Robert Gibson and Ed Jarosz acted on behalf of the McNichols Co., a steel service center that has a national platform, with 17 similar operations and 26 field managers coast to coast. McNichols Co. SVP Larry Jones praised the outcome of the Billerica deal and the real estate team for finding the property in an area that Reardon says is becoming increasingly popular.

“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 secure 670,000 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 Billerica where a former Kmart warehouse being repositioned by ING Clarion scored a 171,000 sf tenant early in the year and FedEx’s leasing of 145,000 sf to close out 2007 on an up note for the 628,000-sf behemoth.

Reardon, whose team is leasing agent for 90 Salem Rd., notes that industrial and manufacturing uses are not new to the metro north suburban region, although he notes there is restricted supply, with most sites along Route 3 having been grabbed for flex and office development, at a time when transportation costs are spurring companies to be nearer their customer, as in the case of Siegel Egg Co. moving to 90 Salem Rd. in early 2007. “That whole industrial market is tightening up considerably,” says Reardon, adding that the widening of Route 3 is seen as another benefit for industrial users, similar to the response among other tenant that gave Route 3 one of its best years ever for commercial leasing activity.

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

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